InnovAge: After CMS Lifted Sanctions, Company Cut Large Portions of Compliance and Quality Departments; Former Employees Say Cuts Will Only Exacerbate Ongoing Patient Harm; Company Already Out of Compliance with Multiple Regulations, Increasing Likelihood of Additional Sanctions

Published on Oct 26, 2023

A few months after CMS and state regulators lifted sanctions against InnovAge (INNV), the country’s largest operator of PACE healthcare programs for low-income seniors, the company fired large portions of staff in its compliance, quality, and nursing departments. The company also began cancelling thousands of referrals for patients to see outside specialists and cutting back on required programs, such as in-home care, for its participants.

“It felt like they thought, ‘CMS is gone, we can go back to the old ways,’” a former employee with insight into InnovAge’s national operations told The Capitol Forum.

InnovAge’s regression not only makes it more likely that regulators, who are now in a monitoring phase, take additional action against the company, employees said, but also have led to serious patient harm.

The Capitol Forum spoke with 15 former employees who had deep insight into the operations of the company and left InnovAge in the last several months. While some were laid off by the company, others quit out of frustration with the company’s practices and their effect on the vulnerable patients in its care.

“It is probably the worst care delivery I have seen in my forty years of experience working in healthcare,” a regional manager told The Capitol Forum. “There is no coordination of care and no oversight. And the thing that hurts me the most is that these are the frailest, sickest participants. PACE should work well, but in the time I was there, it got worse instead of better.”

“I would not let my dog be treated there,” they added.

Other former employees, both in management and clinical operations, agreed that the quality of care at InnovAge had not improved much over the last two years during CMS oversight, and all said they were surprised when CMS lifted those sanctions. Metrics that had improved during the period of CMS oversight, such as timely referrals to outside specialists, have also begun to steadily backslide since CMS lifted sanctions.

“I was very surprised when they lifted sanctions; I didn’t think we were ready for it,” a former nurse practitioner in Colorado said. “Either they overlooked something or maybe they changed their mind and gave us grace. I was really disappointed when they did that.”

Indeed, the company may already be facing increasing scrutiny from regulators. Former employees tell The Capitol Forum that a recent visit by regulators to the company’s Sacramento facility, which had been sanctioned, did not go well, and a Capitol Forum public records request to the state regulatory agency in Colorado, home to six sanctioned facilities, revealed that the state rejected InnovAge’s corrective action plan for recent deficiencies three times before accepting it.

Some of the former employees who worked on compliance issues during the period of CMS sanctions expressed concern to The Capitol Forum over the accuracy of some of the data provided to CMS and state regulators. However, soon after the sanctions were lifted, those employees were let go and InnovAge management ordered staff to delete patient referrals to outside specialists, in what several former employees say was likely a cost cutting measure.

“A few days after the sanctions were lifted, they told us to cancel these outstanding orders, even though they hadn’t been completed and the patient hadn’t seen a specialist,” the nurse practitioner in Colorado said. “I assume they were trying to cut back on costs.”

Internal InnovAge documents shared with The Capitol Forum confirm that hundreds of InnovAge patients at one facility have been waiting months to see specialists such as cardiologists, podiatrists, and neurologists. Cancelling orders, former employees said, has left those patients who need to see specialists unable to do so, and InnovAge’s own policies dictate that a participant must be seen by a specialist within 28 days of an order by a primary care doctor.

While former employees expressed surprise that CMS would lift the sanctions at the California and Colorado facilities, those with insight into the operations of the company’s facilities in Virginia and Pennsylvania say that problems there are just as bad.

“Right now, the Pennsylvania market is an absolute mess,” a former regional manager with knowledge of those programs said, “Operationally, Pennsylvania and Virginia are failing clinically and ethically. If they got audited soon, it would be a no brainer that they get sanctioned.”

The Pennsylvania centers were audited in June of this year by state regulators who did not find compliance issues at the facilities. However, employees familiar with the operations of those centers said that, prior to the audit, several steps were taken to bring the centers into compliance and pass the audit. One employee opined that the centers could have passed an audit if regulators did not look back far enough.

CMS, which is more familiar with InnovAge’s deficiencies in other states, is overdue in auditing the centers, which occur every two years. State regulators in Virginia are set to audit the company in the first half of 2024, and CMS is similarly due to audit those facilities as well.

InnovAge did not respond to a request for comment.

Company sanctioned in 2021 for multiple failures. As previously noted, InnovAge is the largest operator of PACE—Program for All-Inclusive Care for the Elderly—programs in the country, with 17 centers in five states.

PACE programs are fully capitated health care programs in which operators receive a monthly lump sum from state Medicaid programs and the federal Medicare program to provide all healthcare for participants. InnovAge currently estimates that it receives roughly $107,000 per participant annually from the government, and because its patients are dual-eligible for Medicare and Medicaid, they are generally sicker and poorer than the average beneficiary.

Because operators are on the hook for all medical costs, the program incentivizes them to focus on preventative care and screening rather than costlier treatment options down the road. However, those same incentives can also push some operators to skimp on care, which is the main reason why PACE programs were originally required to be non-profit.

In 2016, InnovAge, after years of lobbying the Colorado state legislature and the US Congress, became a for-profit company with a private equity investment by Welsh, Carson, Anderson & Stowe. A few years later, Welsh, Carson, Anderson & Stowe took the company public, making it the only publicly-traded PACE program.

In 2021, The Capitol Forum began reporting on quality of care issues at InnovAge facilities in Colorado and California. Soon after those initial reports, regulators from the state and federal agencies that oversaw InnovAge conducted surprise audits of those facilities.

Ultimately, CMS and state regulators sanctioned several InnovAge facilities, barring them from enrolling any new participants into the program in late 2021. Separately, the Colorado Attorney General and Department of Justice have initiated investigations into the company for potential False Claims Act violations which are currently ongoing, according to the company’s most recent annual SEC filing.

Regulators lifted their sanctions of InnovAge facilities at the start of 2023, allowing the facilities to once again enroll new participants.

Former employees express concern over accuracy data given to regulators. While almost all of the employees who worked at InnovAge said they were surprised that regulators lifted sanctions on the company after only a year, some of the employees who worked on compliance issues told The Capitol Forum that they were concerned about the accuracy of data that the company had provided to regulators.

“When I left InnovAge, compliance reached out to me to see if I had concerns about reports that in-home services was sending to the auditors,” a former manager of in-home services said. “And I said yes, because I couldn’t duplicate those reports. I look at the old ones and I tried to reverse engineer it and I couldn’t duplicate it. The numbers were too good for what I knew our capabilities to be. Part of the sanctions was that we had to be at 100% on some key metrics and somehow, we hit those numbers when there was no way we could have.”

“It was extremely discouraging to go through CMS and state regulator calls, because the action plans people were putting together on quality and risk was just a bunch of fluff,” another former manager said.

Other former employees said they were coached by management on what they could and couldn’t share with regulators, with that former manager saying that “we had prep sessions for meeting with the state, and those meetings were very scripted. ‘Don’t you dare speak about XYZ,’ was what management would say. ‘We will not disclose that this was the reason this patient didn’t get the care they needed. We will slice it another way and they will never know.’”

Employees working in other regions confirmed that issues would often be revised to absolve InnovAge of responsibility when presenting data to regulators. One common example was blaming a missed doctor’s appointment on a patient’s unwillingness to go when in reality InnovAge transportation failed to pick them up.

One former employee said that management coached them to never use the word “request” when describing patient needs, because that would have to be registered as a “service delivery request,” or “SDR,” which would have to be fulfilled by InnovAge in a timely, and auditable, manner.

“Management would say, ‘instead of saying a patient requested this, say that a patient inquired about it.’ They said to not document that a patient requested something or asked for it because we have to process it as an SDR,” a former employee in in-home services said.

“If a patient requests something like a handrail in their home, the employee that receives that request has to log it as an SDR in the system. Then within three days we have to send them a letter saying we are working on it, and within 30 days we have to fulfill the SDR. Those were all things we would probably fail at and CMS would know,” they continued. “I would be told that something wasn’t an SDR when it definitely was. They weren’t being documented appropriately so that they could be rejected.”

“InnovAge is not following the PACE model and they are not providing patients what they are promising,” the former employee added.

In at least one instance, InnovAge staff were told to travel to centers that were about to receive a visit from CMS and pretend that they worked there in order to meet staffing requirements.

All PACE centers are required by CMS to have an 11-person interdisciplinary team (IDT) consisting of social workers, primary care providers, dieticians, and other specialists that coordinate each patients care.

According to an employee that worked at InnovAge’s San Bernardino, California facility, “CMS was going to the Sacramento center, and we had to send members of our IDT, like dieticians, up there to paper over that they didn’t have any. This was done to make it look like they had dieticians at the center when they didn’t in order to pass the audit.”

InnovAge went on firing, enrollment blitz after sanctions lifted. Despite the concerns of employees, CMS ultimately lifted sanctions on InnovAge facilities in California and Colorado at the start of 2023. A few months later and just before the start of the company’s fiscal year on July 1, InnovAge fired roughly 50 people in its compliance and quality departments, including managers specifically brought in to ensure compliance with CMS regulations during the sanction period.

Since then, former employees tell The Capitol Forum that the rate of layoffs has remained steady, with the company continuing to cut compliance and quality staff as well as nursing staff.

“When I came in, they were doing corrective actions, all this stuff to meet CMS criteria,” a former center director said, “We came off sanctions and come July, InnovAge laid off 50% of their compliance team and 50% of quality team because the sanctions were over, and everything we’ve been working on came to a halt.”

“The firings were 100% because they thought they were out of the woods with CMS,” a former regional opined. “It was 100% ‘How do we cut cost, how can we get through this?’ There was no reason compliance and OpEx [Operational Excellence] should have been cut, if anything they should have been increased.”

Some of the compliance employees that were laid off told The Capitol Forum that the move came as a shock, given that the company had been hiring compliance staff only a few weeks earlier.

“I was let go only after a couple of months, and I had staff that I had hired that weren’t even there a month before they were let go,” a former quality director said, adding that there “were about 40-50 people let go in June and they pretty much cleared out their entire compliance department and a lot of people in quality.”

Another employee who worked in quality said that the firings resulted in many ongoing projects to be left in limbo.

“When I was hired, I was told that due to some of those sanctions and findings, InnovAge was looking to increase their quality metrics. Most of the things we did was making sure we were regulatorily compliant,” the former quality employee said. “I was working on grievance resolution and beginning to develop preventative action plans for those grievances, which is something that regulators really like to see. They don’t just want to see that your corrective actions but forward-thinking preventative actions. That’s what I was told I would be working on when I was hired.”

“A few months later, they fired me, and they didn’t give us any opportunity to hand over any of the projects we were working on to whoever remained,” the former employee continued, “They were left holding the bag of anything that was part way worked on or being investigated. No clear and complete hand off process improvement projects we were working on, like fall prevention. Management just told us to log off and be done for the day.”

In addition to compliance and quality, InnovAge also began cutting positions in nursing and let go many of the temporary doctors, known as locum tenens, hired during the sanctions. A former employee with insight into InnovAge’s national operations said that the move “has definitely impacted quality of care. It is very apparent all of the cuts were to increase profitability without regard to the patients.”

While centers may have been struggling with staffing shortages, InnovAge told managers at those centers to begin enrolling as many participants as they could in order to make up for the loss of patients during the sanction period.

“There was a waitlist for participants to be seen,” a former regional manager said, “We didn’t have staff for them but we enrolled them anyways.”

“In April, the first month they started taking patients again, I remember thinking, why not hold off on that and improve in-home services,” a former manager of in-home healthcare said, “and the response was, we’ve just got to get rolling and getting more people into this program.”

The enrollment blitz, former employees say, extended to patients that likely were not suitable for a PACE program because of mental health issues or violent tendencies toward staff, but were enrolled anyways in order to increase revenue.

“We were bullied into enrolling participants who should not be in our program just to get a buck,” a former manager with broad insight into the company’s clinical operations said, “That was frustrating because we couldn’t provide the services these people really needed.”

Company likely already out of compliance with several PACE regulations. The loss of much of the company’s compliance department has already had an effect on InnovAge’s compliance with PACE regulations. Employees with broad insight into the company’s operations described a litany of compliance issues that had begun to spring up in the months prior to their departure.

“To do home visits, it is required by law that we have an EVV [Electronic Verification of Visit] requirement which is done with a GPS time stamp,” a former regional manager said. “In my region, nurses weren’t going out and doing these visits, they were just calling participants in their home to check up on them. There was no EVV at all, so we were totally out of compliance with that, and it won’t be hard to find that in an audit.”

“A major part of PACE is that enrollees have to have stable, safe housing to be enrolled in the program, and so that assessment obviously has to be done in their home,” another manager in another area told The Capitol Forum. “But they brought potential enrollees into the clinic because it was easier and cheaper than sending a nurse to them. Well, how are we supposed to assess their home situation if we never go to their home?”

Several former employees told The Capitol Forum that the elimination of much of the compliance department will likely have major implications for the company down the road given that compliance often saved upper management from its own cost-cutting and profit-focused actions.

One former employee told The Capitol Forum that it “doesn’t make any sense to cut compliance right now.”

“There were instances of upper management pushing things that would have been totally non-compliant and gotten them in a lot of trouble, and compliance saved them,” the former employee said. “For example, management was pushing to disenroll participants with high ER visits because they were too costly. You just can’t do that out of hand, because under PACE, you own that patient’s care for better or worse.”

Specialist orders months outstanding, subsequently deleted. One area that employees said had become particularly bad in recent months is referrals to outside specialists, a key metric tracked by CMS. Under PACE regulations, participants must be seen as soon as possible, and InnovAge’s own guidelines, to which CMS holds the company accountable, state that routine referrals to specialists must be completed within 28 days.

For PACE programs, these referrals can be particularly costly because specialists are generally outside of the program’s system of primary care nurses and doctors.

Leading up to CMS’ audit and subsequent sanctions in 2021, InnovAge had a particularly bad track record of fulfilling these referrals.

A 2019 whistleblower complaint alleged that 852 of 975 specialist referrals were outstanding by more than 30 days at the company’s San Bernardino, California facility, the company’s largest. The Capitol Forum also obtained internal emails sent by the director of the company’s Pueblo, Colorado facility from April 2021 in which the director ordered staff to “clean up” outstanding orders in order to be compliant with CMS regulations.

“We will need these cleaned up by the first week of May – I know this is aggressive but compliance is a major focus for all facilities right now – we cannot continue to have these orders outstanding.  If they need to be cancelled and re-ordered then so be it – regardless we cannot have orders out 180+ days,” the center director wrote. According to the email, 305 orders for care were outstanding by more than 180 days.

These problems, according to former employees close to the issue, improved during the CMS sanctions but have since reverted back to their initial state once the sanctions were lifted.

“It got better in Colorado because they hired an abundance of additional schedulers and they were able to catch up a bit,” a former employee with insight into InnovAge’s national operations said. “But those positions were probably eliminated. When I left, it began being a problem again, and there were outstanding orders and referrals that had not been done. It was never addressed operationally. The solution instead was to just cancel those orders and clear them. The problem was that I believe some of those orders that were deleted without provider approval.”

A former employee forwarded documents to The Capitol Forum showing that thousands of specialist referrals were out of compliance at their clinic:

The above chart details one doctor’s orders for cardiology consults for several of their patients, with the furthest right column indicating when the doctor placed the order. A screenshot of this chart was taken in early October 2023.

Most of the orders are well past the 28-day requirement for being processed and are listed as either ordered of scheduled, meaning the patient has not seen a specialist yet. Some unprocessed orders were made as far back as 2022, as indicated in the right column.

Importantly, the above chart depicts a common issue in InnovAge’s system: the need for physicians to place multiple orders for the same referral in the hopes that one gets processed. According to several former employees, because of InnovAge’s disorganization, physicians often place multiple orders in the hopes that one will actually make it through and get processed.

In the above chart, for example, the doctor placed six orders for a cardiology consult for the same patient, Patient 1, beginning in July 2023.

“It’s like buying multiple tickets for the lottery,” one nurse practitioner told The Capitol Forum.

Several former employees told The Capitol Forum that, in the last several months, upper management told employees to begin deleting older, outstanding orders.

“Order tracking, they just began going through and eliminating a lot of orders, saying they were duplicates that were clogging up the system, but they weren’t duplicates,” a former regional manager said. “A lot of patients are still waiting to see these specialists.”

Disorganization and penny-pinching have led to serious harm and patient death, according to former employees. Several former employees told The Capitol Forum that InnovAge’s ability to track workflows, such as which patients have received what care and medications, in its electronic medical records (EMR) system as incredibly poor, with one manager saying their time at the company was the “most disorganized chaos I have ever been a part of. There is just no communication across care teams.”

“InnovAge schedulers repeatedly failed to schedule patients for appointments,” one primary care provider said, “I can’t imagine such complete inability to schedule appointments and coordinate transportation for those appointments. It delays care.”

According to an employee that worked in homecare, there was terrible coordination between their department and the staff at the clinic.

“An issue I saw frequently was that there would be wound care orders, but they would have no documentation of who was doing them, whether it was the patient, a family member, a homecare nurse, or the clinic. It would be confusing to know who is doing the wound care, so it would be very easy to miss that,” the former employee said.

“For example, if a person was being seen by a clinic and was scheduled for wound care at the clinic Monday, Wednesday, Friday, if Monday was a holiday and the clinic was closed, there would be no coordination to have that bandage replaced by a homecare nurse or have the patient brought in on the following Tuesday.”

“With insulin orders, there were some patients who would have orders to have insulin at home some days a week and other days of the week at the center,” the former employee continued. “I know some patients who got insulin twice in one day because they got it at home and then went into the center for something else later in the day and got it there as well. This happened across the board in Colorado.”

Other employees similarly cited coordinating insulin shots as a significant area of concern, with one telling The Capitol Forum that “we once enrolled someone we didn’t go see for six or seven days. In-home services was responsible for daily insulin, and we missed all those appointments.”

One former employee told The Capitol Forum that, on top of missing insulin shots, InnovAge management also recently restricted the use of more expensive medications for diabetics, citing cost.

“Participants at InnovAge are frail, elderly, commonly have arthritis in their hands, poor vision, and cognitive problems which stop them from being able to draw up insulin or read the dial for insulin pens,” a primary care provider told The Capitol Forum. “During my time at InnovAge we were encouraged by the onsite pharmacist to use weekly injectable medications in lieu of traditional insulin to make blood sugar stable and improve patient health. These patients are seen in clinic once a week for injection and assessment by a nurse as an extra safety check.”

However, the primary care provider continued, “In October 2023, the new CMO [Chief Medical Officer], announced at the morning meeting that InnovAge didn’t want to pay for expensive insulin alternatives and we needed to restrict their use. Stating that ‘these people are old, they’re not going to get better, it’s okay to keep them at a higher A1C.’”

According to a nurse practitioner in another state, that organizational chaos, in their opinion, led to a patient overdosing on a medication and dying as a result. According to that nurse practitioner, an InnovAge patient died at a nursing home because employees at InnovAge failed to communicate an updated medication program to the nursing home staff.

“The facility overdosed a patient,” the nurse practitioner said. “It was a medication error that could have been prevented if we had some form of process to follow through to make sure the orders were getting through. That was the beginning of the end for me, I just couldn’t deal with it anymore. They were promising change but nothing was improving.”

“People were killed because a lack of coordination,” a regional manager told The Capitol Forum.

Pennsylvania centers audited in June, Virginia centers to be audited in first half of 2024. InnovAge operates four facilities in the Philadelphia area, which it acquired from another PACE program in 2018 (PACE is known as LIFE in Pennsylvania). Those centers had not been audited for several years due to the coronavirus pandemic.

According to a spokesperson for the Pennsylvania Department of Human Services, “DHS conducted an audit of InnovAge in June 2023” and the state did not find any compliance issues.

However, a former employee of the company told The Capitol Forum that several steps were taken prior to that audit to bring the centers into compliance and pass.

The former employee described similar issues with order tracking in the Philadelphia centers as the California and Colorado centers, telling The Capitol Forum that “when I first arrived, they had this huge meeting where they were preparing for their overdue audit and they had 10,000 orders outstanding across all the LIFE centers.”

“For a procedure to be closed out in the database, there has to be documentation that shows that the appointment was completed. There were very poor processes in place to confirm that patients had been seen, and without that documentation, nurses would often put in multiple orders, which led to the accumulation of 10,000 outstanding orders. When they realized how many there were, instead of rectifying the situation to capture the order and make sure they had received the appropriate treatment as scheduled, they asked staff to close out these orders regardless of whether the individual had seen the specialist or not. Just deleting these orders to get ready for the audit.”

Asked whether the centers could pass the audit, the former employee said that it would be dependent on how far back the auditors went.

“At the start of 2023, they switched their EMR [electronic medical records] software from TruChart to Epic, and they only archived some of the information from TruChart. A lot of those 10,000 outstanding orders weren’t ported over from TruChart. If CMS or the state looks back just 6 months, they might not see all the cancellations,” the former employee said.

InnovAge operates another four centers in Virginia, which it similarly acquired from another program. According to a spokesperson for the Virginia Department of Medical Assistance Services, “the schedule of upcoming quality management reviews of the DMAS-contracted PACE organizations is currently being developed and is anticipated to be implemented during the first half of 2024.”

Former employees with insight into InnovAge’s national operations told The Capitol Forum that they would similarly be surprised if the Virginia centers passed, given that the many of the problems at the company were systemic rather than localized at certain centers. The Pennsylvania and Virginia PACE programs account for roughly one-fourth of all InnovAge enrollees.