InnovAge: CMS Currently Auditing Albuquerque Center; California Suspends Medicaid Enrollments at Troubled Sacramento Center

Published on Nov 11, 2021

InnovAge (INNV), the country’s largest provider of senior health services under the government Program for All Inclusive Care for the Elderly (PACE), has been under audit by Centers for Medicare and Medicaid Services as well as state agencies in both California and Colorado for the last several months. That scrutiny appears to have extended to the company’s New Mexico operations as well.

On a recent earnings call, InnovAge CEO Maureen Hewitt told investors that “we will begin a routine audit in New Mexico that will be handled remotely” when discussing government regulation of the company.

That New Mexico audit, however, has already been going on for several weeks, according to an employee at the center. A spokesperson for the New Mexico Human Services Department, which has oversight of InnovAge’s PACE centers in the state, confirmed that CMS was already auditing the facility and had proactively reached out to the department.

According to the spokesperson, while the Albuquerque center was scheduled to have a routine audit, CMS “started earlier this year due to what’s been going on in other states,” referring to the audits in Colorado and California. Department staff is aware of the issues in those other states, the spokesperson added, and said that CMS was briefing department staff on the Albuquerque audit daily and expects to have CMS’ findings in a couple weeks.

The Capitol Forum has written extensively on quality-of-care concerns at InnovAge facilities across the country, including the Albuquerque center. An employee at that center previously described to The Capitol Forum extremely long delays in care for patients there, such as several month delays for a patient to see a pain specialist.

CMS does not appear to have initiated audits in the two remaining states, Virginia and Pennsylvania, in which InnovAge operates. Spokespeople for the state administrating agencies in both states told The Capitol Forum that they had not been contacted by CMS about InnovAge.

Should CMS find that InnovAge was unable to provide adequate and timely care at the Albuquerque center, the agency could suspend Medicare enrollments until the deficiencies are corrected, which recently happened at the company’s Sacramento facility.

Separately from CMS, the state of California also suspended Medicaid enrollments at the Sacramento facility, which the company has not disclosed. In a statement to The Capitol Forum, a

spokesperson for the California Department of Healthcare Services said that the agency had “issued to InnovAge Sacramento a sanction notice to suspend enrollment of new Medi-Cal beneficiaries effective October 1, 2021.”

The spokesperson declined to comment on any further actions the state agency may take with regard to InnovAge’s San Bernardino facility, which is the company’s largest center with roughly 1,000 PACE participants. The San Bernardino facility was also subject to a 2019 whistleblower lawsuit that alleged that InnovAge was “denying [patients] access to thousands of medically necessary services,” though the government declined to intervene in the case.

InnovAge recently disclosed that CMS had referred findings at the Colorado facilities, which account for roughly half of the company’s business, to the Compliance and Enforcement Division of CMS, which has the ability to determine sanctions for noncompliant programs and was responsible for barring new Medicare enrollments at the Sacramento facility. The outcome of that referral is not yet known.

If CMS bans new Medicare enrollments or if a state bans new Medicaid enrollments, the actions could effectively grind all new enrollments to a halt. About 95% of InnovAge’s participants are eligible for both programs, according to a 2020 audit of the company’s Colorado operations, and likely would not be able to cover the out-of-pocket costs should one program refuse to pay. Only 5% of participants in that audit were Medicaid-only, and none were Medicare only.

InnovAge receives over 99% of its revenue comes from Medicare and Medicaid, with Medicaid accounting for roughly 55% of total funding.

CMS has previously declined to comment on an ongoing matter, and InnovAge did not respond to a request for comment.