What changed in this filing

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Item 1. Business

2025-09-09 compared with 2024-09-10 · 113 added, 90 removed, 421 unchanged (33% of the section changed)

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rising costs and poor outcomes.

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.

Through our Program of All-Inclusive Care for the Elderly (“PACE”) program, we fulfill 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;

The purpose of our participant-centered care delivery approach is 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.

Through our Program of All-Inclusive Care for the Elderly (“PACE”), we fulfill 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;

transportation to and from the PACE center and third-party medical appointments;

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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 requires us to coordinate and manage all aspects of a participant’s health, and deliver the necessary care.

Our vertically integrated care model and full-risk contracts require 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.

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

In addition, as of June 30, 2025, 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.

In addition to reducing spend, we also focus on ensuring our participants are satisfied with the services delivered and frequently evaluate benchmarks and survey methodologies to measure their satisfaction.

Our participant satisfaction is currently 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 quarterly surveys to measure emerging sentiment within a subset of our participants nationally, our average NPS was 45.

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

As part of our quarterly surveys, each year, we conduct an I-SAT survey (“Integrated Satisfaction Measurement for PACE”) to measure NPS across a national sample of our participants.

In fiscal year 2025, our I-SAT NPS score was 56, which compares favorably to a national PACE program average of 55.

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

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

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.

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

Average total spend, including Medicare, Medicaid, supplemental insurance and out-of-pocket spending across all payers, for dual-eligible seniors was more than twice the amount than other Medicare beneficiaries, based on data from the Medicare Payment Advisory Commission (MedPAC) as of 2022.

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

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Prevalence of wasteful spending and sub-optimal outcomes.

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.

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 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.

Healthcare spending on nursing care facilities and continuing care retirement communities is expected to reach approximately $247.1 billion in 2025, based on the latest projections made by the Office of the Actuary of CMS, which is an 8.0% increase compared to the current 2024 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.

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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.

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.

Without personalized, patient-centered care that removes barriers to preventative or other early treatment, high-cost, dual-eligible seniors would likely continue to over-utilize healthcare in higher-cost settings, such as emergency rooms and nursing 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.

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This is driven by two factors:

(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.

(i) we believe we provide care for a higher acuity population, with an average Medicare Risk Adjustment Factor (“RAF”) score of 2.42 based on InnovAge data as of June 30, 2025, 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.

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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.

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, 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.

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 revenue.

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 still relies on fee-for-service reimbursement models.

The COVID-19 pandemic highlighted the need for integrated, multimodal value-based care delivery models.

Traditional healthcare providers experienced reduced revenue and strained ability to provide care during shutdowns and restrictions and as a result of general patient fear of medical settings.

Providers that operate comprehensive value-based models, like us, were and remain better positioned to quickly pivot the care delivery approach to safely treat patients in virtual settings without losing revenue.

Our Market Opportunity

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

we are 16% larger than the size of our closest PACE-focused competitor and more than 30 times larger than the typical PACE operator.

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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.

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 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.

Based on historical results for the year ended June 30, 2025 and our experience and industry knowledge, we estimate an average annual revenue opportunity of $115,000 per participant (or $9,600 PMPM) and a total addressable market opportunity of $265 billion, based on our estimated market of approximately 2.3 million PACE eligible participants in the United States in 2024, as described above.

Of these estimated PACE eligible participants, only approximately 85,000 are

enrolled in a PACE program, based on a June 2025 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 27%.

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

This opportunity is subject to our ability to effectively execute our growth strategy and assumes no adverse macroeconomic or regulatory changes.

For example, reductions to the Medicaid portion of PACE capitation rates from the recently enacted federal budget reconciliation bill, the One Big Beautiful Bill Act (the “OBBBA”), will have a negative impact on the size of our estimated total addressable market opportunity for PACE.

The InnovAge Platform

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

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

As of June 30, 2025, approximately 93% of our participants were able to live safely in their homes and communities.

Our interdisciplinary care teams.

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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 so that each participant receives optimal treatment based on his or her current conditions.

Members of the IDTs meet multiple times per week to discuss participant care and to 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.

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Our virtual care capabilities give us the flexibility to deliver medical care and social services virtually when appropriate.

Our physicians are equipped with several telehealth platforms to provide virtual care and utilize the option best suited for each individual participant’s preferences and needs.

Our physicians are equipped with HIPAA compliant platforms to provide virtual care.

We offer telehealth visits when clinically indicated, allowed per regulations and more convenient for the participant.

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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.

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• For the fiscal year ended June 30, 2025, our participant census was approximately 7,740 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.

During fiscal year 2025, we focused on increasing enrollments and utilization of capacity at our existing centers, in part by furthering engagement in communities in which our centers operate.

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.

• In fiscal year 2025, we ramped up our newer de novo centers in Florida (Tampa and Orlando).

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

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• 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

• 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).

Execute tuck-in acquisitions, strategic transactions and partnerships

• Over the past seven 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.

In addition, in fiscal year 2025, we acquired certain pharmacy assets from Tabula Rasa HealthCare Group (“TRHG”) with the goal of supporting our growth and improving pharmacy cost-management.

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.

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.

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

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.

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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.

In fiscal year 2025, enrollments at our Orlando center increased, in part because of this partnership.

In August 2025, we entered into a joint venture with Tampa General Hospital to support our Tampa PACE center.

We expect to continue to explore additional strategic partnerships in the communities in which we operate.

Reinvest in the InnovAge Platform to optimize performance

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• 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.

• We have begun to invest in building capabilities to increase our sophistication as a payor to drive clinical value, improve outcomes, and manage cost trends.

• We are investing in building capabilities to increase our sophistication as a payor to drive clinical value, improve outcomes, and manage cost trends.

• We believe our investments will ultimately result in better health outcomes and lower medical costs for participants.

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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;

• 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;

• 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 incidents 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;

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• 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 clinical providers;

• changes in and reinterpretation of rules and laws by a regulatory agency board, or court, such as state corporate practice of medicine laws, that could affect the structure and management of our business;

• changes in and reinterpretation of rules and laws by a regulatory agency board, or court, such as state corporate practice of medicine laws, which could affect the structure and management of our business;

• changes in payor reimbursement, including negative adjustments to government payment models including, but not limited to, Medicare Parts C and D and Medicaid;

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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.

We routinely take the steps we believe are necessary to retain or obtain all requisite licensure and operating authorities.

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

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Individuals and entities convicted of a criminal violation of the federal Anti-Kickback Statute are subject to mandatory exclusion from participation in Medicare, Medicaid, and other federal healthcare programs for a minimum of five years.

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.

Civil penalties for violation of the Anti-Kickback Statute include up to $124,732 (adjusted for inflation) 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 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.

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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.

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 considering 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.

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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:

We have entered, and may continue to enter, into 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 two of our centers, our Sacramento, California center, and Orlando, Florida center, under joint ventures, each with a not-for-profit healthcare provider.

As of June 30, 2025, we operated two of our centers, our Sacramento, California center, and Orlando, Florida center, under joint ventures, each with a not-for-profit healthcare provider.

Additionally, in August 2025, we entered into a joint venture with Tampa General Hospital, a not-for-profit healthcare provider in Tampa, Florida.

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

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We employ our own sales force and attempt to meet the Anti-Kickback safe harbor for bona fide employment.

As noted in the examples above, we have endeavored to structure our business arrangements to fit within applicable federal Anti-Kickback Statute safe harbors and to otherwise operate in material compliance with the federal Anti-Kickback Statute and state analogs.

Many of our arrangements are structured to provide for compensation that is fair market value for services actually rendered and in a manner that does not reflect the volume or value of referrals generated between the parties.

Many of our arrangements are structured to provide for compensation that is fair market value for services rendered and in a manner that does not reflect the volume or value of referrals generated between the parties.

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.

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Federal Self-Referral Prohibition

The federal Ethics in Patient Referral Act (“Stark Law”) generally prohibits a physician who has (or whose immediate family member has) a financial relationship with certain types of entities from making referrals to that such entities for “designated health services” if payment for the services may be made under Medicare or Medicaid.

The federal Ethics in Patient Referral Act (“Stark Law”) generally prohibits a physician who has (or whose immediate family member has) a financial relationship with certain entities from making referrals to such entities for “designated health services” if payment for the services may be made under Medicare or Medicaid.

“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.

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.

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Claims filed in violation of the Stark Law may be deemed false claims under the FCA.

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

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.

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

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 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 financial risk assumed by the arrangement’s participants.

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.

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

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

As of January 15, 2025, the minimum False Claims Act penalty increased from $13,946 to $14,308 per claim.

The maximum penalty has increased from $27,894 to $28,619 per claim.

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We perform monthly checks on our employees and certain affiliates and vendors using government databases to confirm that these individuals have not been excluded from federal programs or otherwise ineligible for payment.

We have also implemented processes to ensure that we do not make payments to contracted or noncontracted providers listed on CMS’s preclusion list nor make payments for drugs prescribed by individuals on the preclusion list.

However, should an individual or entity be excluded, on the preclusion list, or otherwise ineligible for payment and we fail to detect it, a federal agency could require us to refund amounts attributable to all claims or services performed or sufficiently linked to such individual or entity.

We have also implemented processes to avoid payments to contracted or noncontracted providers listed on CMS’s preclusion list and payments for drugs prescribed by individuals on the preclusion list.

Should an individual or entity be excluded, on the preclusion list, or otherwise ineligible for payment and we fail to detect it, a federal agency could require us to refund amounts attributable to all claims or services performed or sufficiently linked to such individual or entity.

Due to this area of risk and the possibility of other allegations being brought against us, we cannot foreclose the possibility that we could face allegations of noncompliance with the Civil Monetary Penalty Statute that have the potential for a material adverse impact on our business, results of operations and financial condition.

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 their patients or participants and their health information.

HIPAA requires covered entities, and the business associates with whom such covered entities contract for services involving the use or disclosure of PHI to provide certain protections to their patients or 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 procedures and implement and maintain administrative, physical, and technical safeguards to protect

the security of such information.

such information.

Additional security requirements apply to electronic PHI.

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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, 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.

Beginning in December 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.

However, in June 2024, a federal court limited the scope of this guidance by ruling that collecting IP addresses from visits to unauthenticated public health-related webpages does not trigger HIPAA obligations, and HHS is assessing next steps.

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.

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.

In addition, HIPAA provides for criminal penalties of up to $250,000 and ten years in prison, with the most severe penalties associated with obtaining and disclosing PHI with the intent to sell, transfer or use such information for commercial advantage, personal gain or malicious harm.

Further, state attorneys general may bring civil actions seeking either injunction or damages in response to violations of the HIPAA privacy and security regulations that threaten the privacy of state residents.

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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.

Additionally, many states have 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.

Some state privacy and security laws overlap with federal law, some of which are preempted, in part by federal laws, whereas others are not.

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

While states have urged Congress not to weaken existing state privacy protections by adopting a less stringent national standard, many healthcare stakeholders have supported federal preemption of state data privacy legislation.

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.

Federal and state consumer protection laws, including laws that do not on their face specifically address data privacy or security, have been applied to data privacy and security matters by a range of government agencies and courts.

In late 2024, the OCR proposed an update to the HIPAA Security Rule aimed at strengthening the health sector’s cybersecurity infrastructure in response to a significant increase in cyber attacks in recent years.

The proposed updated would impose additional requirements on covered entities and business associates to enhance the protection of electronic PHI.

Healthcare Reform Efforts

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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.

Some examples of legislative and regulatory changes impacting our business include:

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• 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.

It is not yet clear what effect, if any, these legislative changes and any subsequent implementing regulations and guidance will have on our business.

This sequestration has been extended through fiscal year 2032 for Medicare benefit payments.

• Implementation of the Inflation Reduction Act of 2022 (“IRA”) introduced significant changes to Medicare prescription drug pricing, including requirements for Medicare drug price negotiations, inflationary rebates, and a reduction in the out-of-pocket spending cap for Medicare Part D beneficiaries from $7,050 to $2,000 beginning in 2025.

While these provisions are intended to lower drug cost for beneficiaries, they may affect prescription drug costs and reimbursement for PACE organizations.

Implementation of the IRA is subject to ongoing litigation challenging the constitutionality of the IRA’s Medicare drug price negotiation program, and the full effects on our business and the healthcare industry remain uncertain.

• Recent federal legislation has extended many of the Medicare telehealth flexibilities that were implemented during the COVID-19 pandemic through September 30, 2025.

The OBBBA, signed into law on July 4, 2025, also includes a provision for permanent pre-deductible coverage of telehealth services under high-deductible health plans linked to health savings accounts, which could result in permanent Medicare telehealth flexibilities, potentially impacting PACE care delivery models.

• The “Medicare Program;

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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:

• The remaining provisions of the 2024 PACE Final Rule were issued alongside the new PACE final rule for 2025 (the “2025 PACE Final Rule”).

The 2025 PACE Final Rule includes various changes that include but are not limited to:

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

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

• CMS released an updated PACE Medicaid Capitation Rate Settling Guide, effective January 1, 2025, which clarifies and expands requirements for state development and documentation of PACE Medicaid capitation rates.

Under the new guidance, states must provide more detailed supporting data and methodologies when submitting proposed rates to CMS for approval.

• The OBBBA mandates significant reductions in federal Medicaid spending, with the Congressional Budget Office estimating a decrease of approximately $1 trillion over the next ten years.

OBBBA also introduces new work requirements for Medicaid recipients aged 19 to 64, necessitating at least 80 hours per month of work, education, or volunteer activities, unless they qualify for certain exemptions.

The OBBBA also narrows Medicaid eligibility for qualified immigrants.

States will be required to conduct eligibility verifications of Medicaid enrollees in the expansion population every six months (unless otherwise exempt), increasing from the previous annual requirement.

These changes may lead to decreased Medicaid enrollment among existing and prospective PACE participants, potentially reducing our funding and decreasing margins.

OBBBA also introduces cost-sharing measures, requiring Medicaid beneficiaries with incomes between 100% and 138% of the federal poverty level to pay up to $35 per service for certain healthcare services.

As a result, eligible participants could be deterred from enrolling in or continuing enrollment with PACE programs, possibly impacting our ability to retain or increase our participant base.

In addition, the new requirements will necessitate adjustments in our administrative processes to ensure compliance with more frequent eligibility verifications and other reporting standards mandated by federal and state regulatory agencies

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.

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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.

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.

In January 2025, we completed the acquisition of certain pharmacy assets from TRHC.

Our pharmacy business subjects us to additional extensive federal, state, and local regulation governing various aspects of the business, including the distribution and dispensing of drugs;

licensure of facilities and professionals;

packaging, storing, distributing, shipping, and tracking of pharmaceuticals;

repackaging of drug products;

labeling consumer disclosures;

interactions with prescribing professionals;

supply chain security;

as well as additional requirements of various governmental authorities, including state boards of pharmacy and the U.S.

Consumer Product Safety Commission.

Federal and state law also governs the purchase, handling, and dispensing of controlled substances by physicians and other clinicians.

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We have in the past and continue to intend to grow our business through acquisitions in the states in which we currently operate or in new states that we seek to enter.

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.

Several states, including California, New Mexico and Colorado have adopted laws focused on competition, quality, access, and cost that either authorize state agencies to review and approve certain healthcare transactions or require notice prior to certain healthcare transactions, such as in California (requiring notice to the office of Health Care Affordability with certain transactions referred to their attorney general for further review) or New Mexico (requiring approval for certain transactions involving acquisitions and other changes in control of hospitals, including formation of a partnership or joint venture that results in an indirect change).

Many other states, including Pennsylvania, where several bills have been proposed are currently voting on or considering similar legislation.

These notices and approvals typically require a substantial amount of information, including supporting documentation.

While certain of these proposed laws and restrictions primarily target physician and dental practice management, they reflect a broader trend of increased regulatory scrutiny of healthcare transactions, which could 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.

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We estimate and accrue for the expected true-up payments of our participants.

Though no assurances can be made in the future, we have historically used our best estimate for accruing for this payment, and we received net positive true-up payments during the fiscal years ended June 30, 2024 and 2023.

Though no assurances can be made in the future, we have historically used our best estimate for accruing for this payment.

We received net positive true-up payments during the fiscal years ended June 30, 2025 and 2024.

Historically, these true-up payments typically occur between May and August, but the timing of these payments is determined by CMS, and we have neither visibility nor control over the timing of such payments.

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As of June 30, 2025, we had approximately 2,440 employees, including over 1,600 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 February 2024, 75% of our employees indicated that they feel engaged by their work at InnovAge .

We believe that our employees are drawn to this mission and our values, which is why our voluntary retention rate was 69% in fiscal year 2025.

Additionally, in our most recent employee engagement survey conducted in January 2025, 82% of our employees indicated that they are proud to 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 implemented action plans with all staff groups based on survey findings and opportunities uncovered.

Since the launch of our annual employee engagement surveys in fiscal year 2022, we continue to review and implement action plans with staff groups based on the findings and opportunities discovered.

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.

At InnovAge, we strive to be a reflection of the diverse communities that we serve.

We are steadfastly dedicated to fostering an atmosphere that champions diversity, equity, and inclusion throughout all sectors of InnovAge.

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

At InnovAge, we strive to be a reflection of the communities that we serve.

We are steadfastly dedicated to fostering an atmosphere that champions inclusivity throughout all sectors of InnovAge.

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

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.

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

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

As of June 30, 2025, our employed workforce comprised of 76% individuals who identified as women and 58% who identified as minorities.

Training and Development

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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.

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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.

What changed 10-K

Item 1. Business