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Stacey Guerin represents District 4, which includes all of Piscataquis County and 11 communities in Penobscot County, in the Maine Senate. She is the Senate Republican lead for the Legislature’s Inland Fisheries and Wildlife Committee and a member of the Government Oversight Committee.
Mainers who rely on Maine’s non-emergency medical transportation (NET) system are some of our state’s most vulnerable residents. They need to be provided with compassionate, responsive service like that offered by our community action programs (CAPs), such as Penquis CAP in Penobscot and Piscataquis counties.
Despite the high level of care provided by Maine’s CAPs, the Department of Health and Human Services (DHHS) granted Denver, Colorado-based Modivcare Inc. a 10-year, $750 million contract to provide non-emergency transportation services statewide. ModivCare, the nation’s largest NET broker, currently provides these services to half of Maine’s 16 counties. Penquis along with Kennebec Valley CAP and Waldo CAP still provide these services to the other half after Penquis filed a lawsuit challenging DHHS’s award process for the contract.
While Penquis is still in the midst of that lawsuit, complaints against ModivCare from its clients continue to pile up. It seems to me that Modivcare’s model of contracting with other companies is simply not working. I have personally received numerous calls from constituents begging for help because Modivcare caused them to miss important medical appointments. Others were left stranded after their appointments. These individuals were often left without any explanation and had to find alternative transportation.
With client complaints increasing and a lawsuit over the request for proposal (RFP) process ongoing, we received even more unpleasant news when Modivcare filed for bankruptcy protection in August. Saddled with about $1.3 billion in debt, the company is seeking to eliminate more than $1.1 billion of it and said in a separate SEC filing on Aug. 12 that an impairment of goodwill could cost the company “not less than $250 million.” Modivcare also disclosed an internal investigation was underway for “compliance hotline allegations.”
The company’s shaky financial position should not have come as a surprise. Their stock price essentially collapsed over the past year amid allegations of Medicaid and Medicare fraud and overbilling in other states. Additionally, a class-action lawsuit was mounted against Modivcare for allegedly intentionally misleading shareholders and the market.
The awarding of this contract and Modivcare’s subsequent bankruptcy have rightfully led to serious concerns about the DHHS award process. During a September hearing on Modivcare’s bankruptcy, the Legislature’s Health and Human Services Committee questioned officials from DHHS on their contract award process. Department representatives told lawmakers the RFP team receives and reviews litigation as part of the procurement process.
Despite that claim, DHHS awarded Modivcare with full points in the litigation portion of the RFP despite the company having listed 374 cases of litigation in their proposal. Arrests were made in at least one case in Florida and Modivcare settled a Medicaid fraud claim with the State of Ohio and the federal government only three months before the RFP deadline of July 2023.
The Modivcare controversy is just one in a long line of serious procurement deficiencies in our state government, some of which were clearly identified in the recent Single Audit Report issued by State Auditor Matthew Dunlap. It seems DHHS performed very little due diligence on Modivcare. Even if the contract was awarded properly, the company’s bankruptcy means we don’t even know who the owners will be once the process is completed or whether they’ll even be able to deliver the services they’re contracted to provide.
Meanwhile, the transportation system our state used in eight counties Modivcare currently serves has essentially been dismantled. DHHS representatives said they have a backup plan but were noticeably light on the details of it.
It is incumbent upon the Legislature to investigate and review these contracts for state services that are crucial to our residents. At the very least, I believe the Mills administration needs to reopen and rebid this controversial contract. Our residents and those who rely on critical non-emergency transportation deserve the proven and responsive service that our CAPs have provided for years.
