ModivCare's Q4 2024 Earnings Call: Navigating Medicaid Changes and NEMT Challenges

These are the key contradictions discussed in ModivCare's latest 2024 Q4 earnings call, specifically including: Medicaid budget changes impact on NEMT contracts, asset sale process, NEMT margin expectations, NEMT contract structure and fee-for-service transition, and the impact of Medicaid budget changes on NEMT contracts:



Financial Performance and Challenges:
- ModivCare reported revenue of $702.8 million for Q4 2024, reaching a full-year revenue of $2.8 billion.
- The company faced a 20% decrease in consolidated adjusted EBITDA, primarily due to Medicaid redetermination and net NEMT business development activities.
- These financial challenges were attributed to external disruptions like Medicaid redetermination and increased healthcare utilization.

NEMT Segment Dynamics:
- The NEMT segment saw $495 million in revenue, with an increase in trip volume by 8.5% year-over-year.
- Average monthly members decreased by approximately 11% year-over-year, reflecting strategic contract losses and market volatility.
- NEMT's mixed results were due to a decline in membership offset by increased utilization and cost-saving initiatives.

Personal Care Services Growth:
- The Personal Care Services segment reported a 3% year-over-year revenue increase, driven by a 1.4% organic hours increase and 2.6% reimbursement growth.
- The transition to a centralized hybrid approach and recalibrated business management framework contributed to improved financial stability.
- The growth was supported by rate increases and state-based quality incentives.

Remote Patient Monitoring Integration:
- The Remote Patient Monitoring segment saw $19.2 million in revenue, with a 35% margin, reflecting a 1% sequential decrease.
- The segment's integration of new services like Chronic Condition Monitoring and Virtual Care Management expanded service scope and billability as a provider.
- The sequential decrease was due to churn in MA membership, while investments in innovation drove long-term growth potential.