What changed in this filing

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Item 1. Business

2026-09-09 compared with 2025-09-09 · 128 added, 176 removed, 358 unchanged (46% of the section changed)

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We directly contract with government payors, such as Medicare and Medicaid, and do not rely on third-party administrative organizations or health plans.

We believe our model aligns with how healthcare is evolving, namely (i) the shift toward value-based care, in which coordinated, outcomes-driven, quality care is delivered while reducing unnecessary spend, (ii) eliminating excessive administrative costs by contracting directly with the government, (iii) focusing on the patient experience, and (iv) addressing social determinants of health.

We believe our model aligns with how healthcare is evolving, namely (i) the shift toward value-based care, in which coordinated, outcomes-driven, quality care is delivered while seeking to reduce unnecessary spend, (ii) reducing excessive administrative costs by contracting directly with the government, (iii) focusing on the patient experience, and (iv) addressing social determinants of health.

InnovAge Holding Corp.

(formerly, TCO Group Holdings, Inc.) and certain wholly owned subsidiaries were formed as for-profit corporations effective May 13, 2016, for the purpose of purchasing all the outstanding common stock of Total Community Options, Inc.

and certain wholly owned subsidiaries were formed as for-profit corporations effective May 13, 2016, for the purpose of purchasing all the outstanding common stock of Total Community Options, Inc.

d/b/a InnovAge, which was formed in May 2007.

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Additionally, under the Medicare Prescription Drug Plan, the Centers for Medicare and Medicaid Services (“CMS”) share part of the risk for providing prescription medication to the Company’s participants.

We deliver our participant-centered care through the InnovAge Platform (as defined herein), which is designed to bring high-touch, comprehensive, value-based care.

We deliver our participant-centered care through the InnovAge Platform, which is designed to bring high-touch, comprehensive, value-based care.

We believe the traditional fee-for-service reimbursement model in healthcare does not adequately incentivize providers to efficiently manage this complex population.

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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.

Costs under the PACE program are estimated to be 12% lower on average than those for a comparable dual-eligible population aged 65 and older under Medicaid, based on an analysis of the most recently available data by the National PACE Association in May 2026.

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, 2026, 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 and frequently evaluate benchmarks and survey methodologies to measure their satisfaction.

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.

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.

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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.

In fiscal year 2026, our I-SAT NPS score was 52, compared to a national PACE program average of 59.

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.

By 2030, members of the baby boomer generation will be age 65 or older, which is expected to further increase demand for healthcare and long-term care services.

At the same time, nursing home operating capacity has declined in recent years, increasing pressure on the broader long-term care system and the need for alternatives that allow seniors to remain in their homes and communities.

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 2023.

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

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

Highly fragmented, uncoordinated healthcare system.

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This lack of care coordination can result in missed or inaccurate diagnoses, gaps in care, unnecessary spend and ultimately sub-optimal patient outcomes.

The importance of clinical integration and coordinated care continues to be reflected in federal healthcare policy initiatives, including recent CMS Innovation Center strategic priorities focused on prevention, patient empowerment and improved health outcomes.

High-cost, dual-eligible seniors are at high risk of falling through the cracks of the U.S.

healthcare system.

Few government-sponsored programs other than PACE bring together the Medicare and Medicaid benefit for these individuals, creating further barriers to delivering coordinated care.

While access to integrated models like PACE that bring together the Medicare and Medicaid benefit for these individuals has expanded, most dual-eligible individuals remain in unaligned plans, creating further barriers to delivering coordinated care.

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

Based on InnovAge data as of June 30, 2025, the typical InnovAge participant had, on average, ten chronic conditions and, based on the data most recently available to us from a 2023 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, 2026, the typical InnovAge participant had, on average, eleven chronic conditions and, based on the data most recently available to us from a 2024 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.

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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 $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.

Healthcare spending on nursing care facilities and continuing care retirement communities is expected to reach approximately $247.5 billion in 2026, based on the latest projections made by the Office of the Actuary of CMS, which is a 5.6% increase compared to the current 2025 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.

Despite high levels of spending, the U.S.

healthcare system struggles to produce better health outcomes and delivers low levels of patient and provider satisfaction.

Despite leading the world in healthcare spending, the U.S.

continues to lag peer nations on many health outcomes while facing persistent clinician burnout and workforce dissatisfaction.

Payment structures are evolving to address healthcare issues.

Policymakers and healthcare experts generally acknowledge that the fee-for-service model is not designed to deliver on the “triple aim” of providing low-cost, high-quality care while improving the patient experience.

Policymakers and healthcare experts generally acknowledge that the fee-for-service model is not designed to deliver on the “triple aim” of providing low-cost, high-

quality care while improving the patient experience.

Historically, healthcare delivery was oriented around reactive care for acute events, which resulted in the development of a fee-for-service payment model.

By linking payments to the volume of encounters and pricing for higher complexity interventions, the fee-for-service model does not incentivize providers to practice preventative medicine or manage patients in lower cost settings.

Rather, many policymakers and healthcare experts

believe it unintentionally creates the opposite result—acute, episodic care delivered in high-cost settings that unnecessarily drive up the total cost of healthcare.

Rather, many policymakers and healthcare experts believe it unintentionally creates the opposite result—acute, episodic care delivered in high-cost settings that unnecessarily drive up the total cost of healthcare.

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 likely continue to over-utilize healthcare in higher-cost settings, such as emergency rooms and nursing homes.

Without personalized, patient-centered care that removes barriers to preventive or other early treatment, high-cost, dual-eligible seniors would likely continue to disproportionately rely on 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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These services, such as care coordination and ancillary support to remove barriers created by social determinants of health, can have a significant impact on a participant’s overall health.

InnovAge participants are, on average, more complex and medically fragile than other Medicare-eligible patients, including those in average Medicare Advantage (“MA”) programs.

As a result, we receive larger payments for our participants compared to MA participants.

A study published in 2026 and led by the U.S.

Department of Health and Human Services (“HHS”) on integrated care and health outcomes of dual-eligible individuals found that PACE participants experienced fewer hospitalizations and emergency department visits and lower mortality than comparable Medicare Advantage (“MA”) beneficiaries, providing additional evidence supporting fully integrated care models for complex dual-eligible populations.

InnovAge participants are, on average, more complex and medically fragile than other Medicare-eligible patients, including those in average MA programs.

As a result, we receive higher capitated payments per participant compared to MA participants.

This is driven by two factors:

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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 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.

While providers, payors, and technology companies have made significant investments in solutions designed to improve quality and reduce costs, the healthcare industry remains in a multi-year transition toward value-based reimbursement, with traditional fee-for-service payment arrangements continuing to represent a meaningful portion of healthcare spending.

Our Market Opportunity

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Our care model targets the most complex, frail subset of the dual-eligible senior population.

We estimated our target population at approximately 2.3 million in 2024 based on data from the U.S.

We estimate our target population at approximately 2.3 million in 2025 based on data from the U.S.

Census Bureau from 2018, representing seniors who we believe are dually eligible for Medicare and Medicaid and meet the nursing home eligibility criteria for PACE.

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.

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, 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%.

We currently 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 which is designed to provide comprehensive, coordinated healthcare to enable our seniors who are eligible to reside in nursing homes to live independently in their homes and communities.

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, with dignity and on their own terms, for as long as possible.

Based on results for the year ended June 30, 2026 and our experience and industry knowledge, we estimate an average annual revenue opportunity of $124,000 per participant (or $10,300 PMPM) and a total addressable market opportunity of $285 billion, based on our estimated market of approximately 2.3 million PACE eligible participants in the United States in

2025, as described above.

Of these estimated PACE eligible participants, only approximately 95,000 are enrolled in a PACE program, based on a June 2026 report from the National PACE Association.

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.

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

For example, reductions to the Medicaid portion of PACE capitation rates from the federal budget reconciliation bill, the One Big Beautiful Bill Act (the “Reconciliation Act”), could have a negative impact on our capitated revenue per enrollee and operational margins, and the financial viability of expanding into new service areas.

The InnovAge Platform

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healthcare system.

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.

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We significantly reduce the caregiving burden on the families of our participants.

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.

Our model handles 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.

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Our providers “Win” as they are able to focus on improving the lives of their participants.

We enable our providers to focus on taking care of participants by providing them with meaningful clinical and administrative support.

We remove the pressure of trying to optimize visit volume by rewarding quality, not quantity, of care.

We estimate that our providers (1) have a smaller number of participants to care for and spend more time with each participant than providers in similar care organizations, and (2) benefit from the support of a multidisciplinary team.

We support our providers through a multidisciplinary care model that integrates physicians, nurses, therapists, social workers and other care professionals to coordinate care across participant needs.

Unlike traditional fee-for-service models that often emphasize visit volume, the PACE model is designed to support comprehensive, participant-centered care for a frail, high-acuity population.

Through this approach, our providers benefit from meaningful clinical and administrative support, enabling them to focus on delivering coordinated, high-quality care.

Government payors “Win” through fiscal certainty and lower costs.

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.

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.

Costs under the PACE program were estimated to be 12% lower on average than the cost of caring for a comparable population through other Medicaid services based on an analysis of the most recently available data by the National PACE Association in May 2026.

Our Growth Strategy

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• For the fiscal year ended June 30, 2026, our participant census was approximately 8,230 across our 20 centers in six states.

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.

During fiscal year 2026, we continued to focus on increasing enrollments and utilization of capacity at our existing centers, in part by furthering engagement in communities in which our centers operate.

For example, we have entered into joint ventures in Orlando and Tampa, Florida in an effort to increase outreach and create value to participants in those communities.

Build de novo centers

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

• In fiscal year 2026, we continued to ramp 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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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).

• Over the past eight 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.

In addition, in fiscal year 2025, we acquired certain pharmacy assets from Tabula Rasa HealthCare Group (“TRHC”) 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.

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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.

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

We 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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Our platform is the largest among PACE providers based on participants served and one of the most geographically diverse.

• We plan to continually invest in technology improvements and seek to unlock new insights through enhanced data analytics capabilities that will advance our care model.

• We continually invest in technology improvements and seek to unlock new insights through enhanced data analytics capabilities that will further advance our care model and increase administrative efficiencies.

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

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These laws and regulations require us to meet various standards relating to, among other things, arrangement and provision of covered healthcare services to our participants, operation and management of PACE centers, dispensing of pharmaceuticals, personnel qualifications, maintenance of proper records, and quality assurance programs.

If any of our operations are found to violate applicable laws or regulations, we could suffer severe consequences that would have a material adverse effect on our business, results of operations, financial condition, cash flows, reputation and stock price, including:

If any of our operations are found to violate applicable laws or regulations, we could suffer severe consequences that could have material adverse effects on our business, results of operations, financial condition, cash flows, reputation or stock price, including:

• suspension, termination or exclusion of our participation in government payor programs;

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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 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;

• imposition of and compliance with corporate integrity agreements that could subject us to ongoing audits and reporting requirements as well as increased scrutiny of our business practices which could lead to potential fines, among other things;

• imposition of and compliance with corporate integrity agreements, which could subject us to ongoing audits and reporting requirements, increased scrutiny of our business practices and potential fines or penalties, among other things;

• 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, 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;

• changes in payor reimbursement, including negative adjustments to government payment models under Medicare Parts C and D and Medicaid;

• harm to our reputation, which could negatively impact our business relationships, the terms of government payor contracts, our ability to attract and retain participants, physicians, and other clinicians, our ability to obtain financing and our access to new business opportunities, among other things.

We expect that our industry will continue to be subject to substantial regulation, the scope and effect of which are difficult to predict.

Our activities have been and could continue to be subject to investigations, audits and inquiries by various government and regulatory agencies with whom we contract at any time in the future.

Our activities have been and could continue to be subject to investigations, audits and inquiries by various government and regulatory agencies with which we contract in the future.

Risk Factors, “Risks Related to Regulation.”

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As a PACE provider that provides qualified prescription drug coverage, we are also subject to Medicare laws, regulations, and requirements applicable to Medicare Part D plan sponsors.

The regulations and contractual requirements applicable to PACE providers are complex and subject to change, making it necessary for us to invest significant resources in complying with these requirements.

Scrutiny through federal and state government audits, oversight and enforcement and the highly technical regulatory scheme in which we operate require us to allocate significant resources to our compliance efforts.

The regulations and contractual requirements applicable to PACE providers are complex and subject to change, making it necessary for us to deploy significant compliance resources.

In addition, new centers that we may acquire in the future may have less developed compliance and quality infrastructures, which may require us to allocate additional resources to making any required enhancements.

CMS and state regulatory authorities regularly audit our performance to determine our compliance with CMS’s regulations and our contracts with CMS and state authorities, and to assess the quality of the services we provide to our participants.

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.

CMS and state regulatory authorities regularly audit our performance to determine our compliance with applicable laws and our contracts with CMS and state authorities, and to assess the quality of the services we provide to our participants.

Such audits have in the past, and may in the future, identify deficiencies in 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.”

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.

Whether identified through such audits or other avenues, any potential failure to comply with the federal and state laws applicable to our business could result in significant or material retroactive adjustments to 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 federal, state and local licensure and certification requirements in connection with our provision of healthcare and other services.

We, the healthcare professionals we employ, 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.

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

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.

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.

In addition to state requirements, we, the healthcare professionals we employ and our centers 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.

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, recoupment of payments, requirements to make significant changes to our operations or civil or criminal penalties.

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, evolving 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.

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In certain states, we contract with physicians to provide healthcare services that are required to be provided by licensed physicians to comply with such requirements.

While we believe that we are in substantial compliance with state laws prohibiting the corporate practice of medicine, regulatory agencies and other parties may assert that we could be engaged in the corporate practice of medicine.

Further, many such state laws are often vague or have otherwise only been infrequently interpreted by courts or regulatory agencies and are subject to change.

While we endeavor to structure our organization and our contractual relationships in compliance with state laws prohibiting the corporate practice of medicine, regulatory agencies and other parties could scrutinize our compliance with such prohibitions.

Further, many such state laws are complex, evolving and often subject to varying interpretations.

In California, for example, legislation enacted in 2025 seeks to strengthen oversight and enforcement of the corporate practice of medicine doctrine.

The consequences associated with violating corporate practice of medicine laws vary by state and may result in physicians or other clinicians being subject to disciplinary action, as well as forfeiture of revenues from government payors for services rendered.

However, if allegations are successfully asserted before the appropriate judicial or administrative forums, we could be subject to adverse judicial or administrative penalties, certain of our contracts could be determined to be unenforceable, and we may be required to restructure our organization or our contractual arrangements.

If allegations are made in judicial or administrative proceedings, we could be subject to adverse judicial or administrative penalties, certain of our contracts could be determined to be unenforceable, and we may be required to restructure our organization or our contractual arrangements.

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

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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 $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.

Civil penalties for violation of the federal Anti-Kickback Statute include up to $127,973 (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.

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.

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 or stock price.

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

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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 considering 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 under a facts and circumstances analysis, taking into consideration the parties’ intent and the arrangement’s potential for fraud and abuse, among other factors.

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 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.

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.

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 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.

Our centers sometimes acquire certain items and services at a discount that may be reimbursed by a federal healthcare program.

We endeavor to structure our vendor contracts that include discount or rebate provisions to comply with the federal Anti-Kickback Statute safe harbor for discounts.

• Sales Force and Participant Recruitment.

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

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.

We have entered, and may continue to enter, joint ventures and other arrangements that are intended to comply with the federal Anti-Kickback Statute and as many elements of applicable safe harbors as possible.

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.

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.

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.

Notwithstanding our compliance efforts, there is a risk that such arrangements could be subject to regulatory scrutiny from the Office of Inspector General (the “OIG”) of HHS and other federal and state enforcement agencies.

Effective January 19, 2021, the OIG adopted final regulations under the federal 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 federal Anti-Kickback Statute, with the stated objective of removing 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 entered by 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.

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

However, compliance with these 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

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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 general 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.

Providers are prohibited from billing Medicare and Medicaid for services arising from 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.

Penalties for violation of the Stark Law include denial of payment, recoupment, refunds of amounts paid in violation of the law, exclusion from the Medicare or Medicaid programs, and substantial civil monetary penalties ($31,670 per prohibited item or service and $211,146 if there is a circumvention scheme;

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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.

In parallel with OIG’s regulations on value-based care discussed above, effective 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 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.

To the extent that we rely on these exceptions to the Stark Law for our value-based arrangements, we intend to comply with such exceptions, but we remain subject to potential regulatory enforcement, self-disclosure requirements or penalties if we are not in compliance, as discussed above.

The False Claims Act

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In addition, amendments to the FCA and Social Security Act impose severe penalties for the knowing and improper retention of overpayments from government payors.

This could be relevant to our business the extent we receive payments on account of RAF determinations that are based on improper or erroneous records or reports.

This could be relevant to our business to the extent we receive payments on account of risk-adjustment determinations that are based on improper or erroneous records or reports.

Failure to return overpayments could subject us to liability under the FCA, exclusion from government healthcare programs and penalties under the federal Civil Monetary Penalty Statute.

The penalties for a violation of the FCA may include per claim penalties, plus up to three times the amount of damages caused by each false claim, which can be as much as the amounts received directly or indirectly from the government for each such false claim.

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

As of July 3, 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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In addition to the FCA, the various states in which we operate have adopted their own analogs of the FCA.

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.

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.

States are becoming increasingly active in using their false claims laws to monitor and prevent 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.

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

For additional information regarding allegations against us under Federal and State FCA statutes, see Item 1A.

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§ 1320a-7a, authorizes the imposition of civil monetary penalties, assessments and exclusion against an individual or entity based on a variety of prohibited conduct, including, but not limited to:

• presenting, or causing to be presented, claims, reports or records relating to payment by Medicare, Medicaid or other government payors that the individual or entity knows or should know are for an item or service that was not provided as reported, is false or fraudulent or was presented for a physician’s service by a person who knows or should know that the individual providing the service is not a licensed physician, obtained licensure through misrepresentation or represented certification in a medical specialty without in fact possessing such certification;

should know that the individual providing the service is not a licensed physician, obtained licensure through misrepresentation or represented certification in a medical specialty without in fact possessing such certification;

• offering remuneration to a federal healthcare program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive healthcare items or services from a particular provider, unless an exception applies;

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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.

Should we fail to identify that an individual or entity is excluded, on the preclusion list or otherwise ineligible for payment, a federal agency could require us to refund amounts attributable to all services performed by or associated with to such individual or entity.

Accordingly, it is possible that we could face allegations of noncompliance with the Civil Monetary Penalty Statute, which may have material adverse impacts on our business, results of operations or 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 PHI to provide certain protections to their patients or participants and their health information.

HIPAA requires covered entities, and the business associates with which 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.

The HIPAA privacy and security regulations extensively regulate the use and disclosure of PHI, and they require covered entities and their business associates to implement and maintain administrative, physical, and technical safeguards to protect the security of such information, including through developing and maintaining policies and procedures.

Additional security requirements apply to electronic PHI.

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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 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.

Covered entities may be subject to fines and penalties for, among other activities, failing to enter into a business associate agreement when 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.

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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.

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.

Beginning in December 2022, OCR issued, and subsequently revised, 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.

Penalties for impermissible use or disclosure of PHI were increased by the HITECH Act by imposing tiered penalties of not less than $100 (not adjusted for inflation) per violation, not 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 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.

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

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 California Consumer Privacy Act of 2018 (“CCPA”) and data breach notification laws.

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.

Additionally, many states have enacted laws that protect the privacy and security of confidential, personal and health information, which may be 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, and some state laws are preempted by federal law while others are not.

States have also passed privacy and security laws and regulations that apply across sectors and go beyond federal law, such as data security laws, secure destruction, Social Security number privacy, online privacy biometric information privacy, and data breach notification laws.

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

• In March 2010, broad healthcare reform legislation was enacted in the United States through the ACA.

There have since been numerous political and legal efforts to repeal, replace or modify the ACA, some of which have been successful, in part, in modifying the law.

Although some provisions of the ACA have been and may be modified, the reforms, particularly those relating to Medicare and Medicaid programs, could continue to have an impact on our business.

These and other provisions of the ACA remain subject to ongoing uncertainty due to developing regulations as well as continuing political and legal challenges at both the federal and state levels.

• There have in recent years been congressional efforts to move Medicaid from an open-ended program with coverage and benefits set by the federal government to one in which states receive a fixed amount of federal funds, either through block grants or per capita caps, and have more flexibility to determine benefits, eligibility or provider payments.

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 beginning on April 1, 2013.

• Since the enactment of the Affordable Care Act (the “ACA”) in 2010, there have been numerous political and legal efforts to repeal, replace or modify the ACA.

Any successful efforts in the future could have an impact on our business.

• In recent years, there have been congressional efforts to move Medicaid from an open-ended program with coverage and benefits set by the federal government to one in which states receive a fixed amount of federal funds, either through block grants or per capita caps, and have more flexibility to determine benefits, eligibility or provider payments.

payment amounts, which would negatively impact those states that expanded their Medicaid programs in response to the ACA.

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

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;

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 (“2024 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;

• The Inflation Reduction Act of 2022 (“IRA”) resulted in significant changes to Medicare prescription drug pricing, including a program under which CMS negotiates prices for certain high-cost, single-source drugs and requirements that manufacturers pay rebates to Medicare when prices for certain drugs increase at rates outpacing inflation.

Beginning in 2024, the IRA eliminated beneficiary cost-sharing above the applicable annual out-of-pocket threshold of $8,000, and beginning in 2025, it reduced that threshold to $2,000, subject to inflation-based adjustments in subsequent years, including an increase to $2,100 for 2026.

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

The IRA’s Medicare Drug Negotiation Program has been subject to litigation, including constitutional and federal Administrative Procedure Act-based challenges;

nevertheless, implementation of the IRA has continued and the full effects on our business and the healthcare industry remain uncertain.

• The CMS Contract Year 2024 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 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 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:

• The CMS Contract Year 2025 final rule set out additional regulatory changes for PACE organizations, including:

(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.

The monetary “coefficient” values associated with diseases that we manage in our population are subject to change by CMS and state agencies.

• The CMS Contract Year 2026 final rule set out additional regulatory changes for PACE organizations, including (i) initiating a phased, multi-year transition to the risk adjustment model historically applied to Medicare Advantage organizations;

and (ii) codifying a requirement for PACE organizations to collect and submit risk adjustment data to CMS.

• On July 4, 2025, the One Big Beautiful Bill Act of 2025 (Public Law 119-21) (the “Reconciliation Act”) was signed into law, enacting significant changes to Medicaid funding and eligibility.

In relevant part, the Reconciliation Act reduces the federal medical assistance percentage for the Affordable Care Act Medicaid expansion population from 90% to 70% over a six-year phase-down period beginning in fiscal year 2027, imposes new community engagement requirements and semi-annual eligibility redeterminations, restricts states' ability to fund Medicaid through provider taxes, and establishes new statutory caps on state-directed payments in Medicaid managed care at or below Medicare payment rates.

Collectively, these changes may have material adverse effects on our business, results of operations, financial condition, cash flows, reputation or stock price by impacting the availability of federal and state funding for PACE and creating potential barriers for the continued Medicaid eligibility of the populations we serve.

We are actively monitoring the implications of these changes across our lines of business.

CMS also routinely changes risk adjustment methodologies, which are central to payment under the PACE program in which we participate.

The monetary values associated with diseases and participants that we manage in our population are subject to change by CMS.

Such changes could have a material adverse effect on our financial condition.

Risk Factors, “Risks Related to Our Business — Our records and submissions to government payors may contain inaccurate or unsupportable information regarding risk adjustment scores of participants, which could cause us to overstate or understate our revenue and subject us to payment obligations or penalties.”

Risk Factors, “Risks Related to Our Business — Our records and other information and materials submitted to government payors may contain inaccurate or unsupportable information applicable to participants’ risk scores, which could cause us to overstate or understate our revenue and subject us to payment obligations or penalties.”

Other Regulations

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These laws do not classify as hazardous most of the waste produced from medical services.

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.

Federal 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 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.

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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;

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Clinical laboratories may be subject to oversight by CMS and state regulators, including the Eliminating Kickbacks in Recovery Act of 2018.

If our laboratories or laboratories that we partner with are not in compliance with the applicable CMS or state laws or regulations, they could be subject to enforcement action, which could negatively affect our business.

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, 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.

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 participant 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.

If our laboratories or laboratories with which we partner with are not in compliance with the applicable CMS or state laws or regulations, they could be subject to enforcement action, which could negatively affect our business.

healthcare industry is highly competitive.

We compete directly with national, regional and local providers of healthcare for participants and clinical providers.

We also compete with payors and other alternate managed care programs for participants.

We also compete with payors, accountable care organization (ACO) models, and other alternate managed care programs for participants.

Of these providers, there are many other companies and individuals currently providing healthcare services, many of which have been in business longer and/or have substantially more resources.

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Our principal competitors for dual-eligible seniors vary considerably in type and identity by market.

Our growth strategy and our business could be adversely affected if we are not able to compete efficiently, including penetrating existing markets or new markets, recruit qualified physicians or if we experience significant participant attrition to our competitors.

Our growth strategy and our business could be adversely affected if we are not able to compete efficiently, including penetrating existing markets or new markets, recruit and retain qualified physicians or if we experience significant participant attrition to our competitors.

Risk Factors—“Risks Related to Our Business—The healthcare industry is highly competitive and, if we are not able to compete effectively, our business could be harmed.”

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Medical costs will vary seasonally depending on a number of factors, but most significantly the weather.

Certain illnesses, such as the influenza virus and COVID-19, are far more prevalent during colder months of the year, which results in an increase in medical expenses during these time periods.

Certain illnesses, such as the influenza virus, COVID-19 virus and respiratory syncytial virus, are far more prevalent during colder months of the year, which results in an increase in medical expenses during these time periods.

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

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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.

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

In addition, the risk score reconciliation 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.

We estimate and accrue for the expected risk adjustment reconciliation 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.

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.

We received net positive risk adjustment reconciliation payments during the fiscal years ended June 30, 2026 and 2025.

Historically, these risk adjustment reconciliation payments typically occur between June and July, but the timing of these payments is determined by CMS, and we have neither visibility nor control over the timing of such payments.

Human Capital Resources

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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.

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.

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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Each year we conduct soft skills training for managers and supervisors, the content of which is informed by gap assessment surveys.

A quarterly training series for front-line leaders enables them to develop their management skills.

Our clinical leaders also conduct separate physician leadership trainings quarterly, with a new topic for each installment (e.g., email / phone etiquette).

A monthly training series for front-line leaders enables them to develop their management skills.

Our clinical leaders meet monthly on a variety of topics including evolving clinical tools to better deliver excellence in clinical care.

We also conduct a periodic training needs assessment surveys to hear directly from employees and managers where they think they could use more support and learning content in the coming year.

These assessment surveys allow the Company to develop trainings tailored to the most prevalent needs identified by our employees.

Implications of being an emerging growth company and a smaller reporting company

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

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.

As an emerging growth company and a smaller reporting company, we may take advantage of reduced reporting requirements that are otherwise applicable to public companies.

These provisions include, but are not limited to:

• not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”);

• a requirement to present only two years of audited financial statements, plus unaudited condensed consolidated financial statements for any interim period and related discussion in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;

• 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 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.

We intend to take advantage of the longer phase-in periods for the adoption of new or revised financial accounting standards under the JOBS Act until we are no longer an emerging growth company.

Our election to use the phase-in periods permitted by this election may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the longer phase-in periods permitted under the JOBS Act and who will comply with new or revised financial accounting standards.

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

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

5 unchanged sentences

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