Augusta Republicans issued a statement Monday morning in response to the news that ModivCare—the out-of-state company awarded a multi-million dollar contract by the State of Maine to provide transportation to MaineCare patients—filed for voluntary Chapter 11 bankruptcy last week.
In addition to raising concerns about the quality of services provided by ModivCare, Senate Republicans, they urged state officials to reconsider their plans to expand their partnership with the company.
Although ModivCare’s statewide contract is currently on hold amidst a legal battle over the legitimacy of the state’s proposal evaluation process, the company has continued to provide medical transport services to patients in eight Maine counties.
As legal challenges continue to wind their way through the court system, contracts were drawn up allowing ModivCare, as well as Maine-based organizations Penquis and Waldo Community Action Partners, to keep operating non-emergency medical transportation services in their respective areas.
Reports suggest that despite the bankruptcy filing, services provided by ModivCare are not expected to be interrupted or changed.
According to a July article from the Portland Press Herald, some Mainers who rely on ModivCare to get to their medical appointments have previously reported struggling to communicate effectively with the company’s out-of-state customer service when there are issues with obtaining a ride as planned.
Despite the concerns that have been raised, the state has said that ModivCare is on time for 91 percent of appointments and has met all performance metrics.
While Penquis and Waldo Community Action Partners are based within the State of Maine, ModivCare is headquartered in Denver, Colorado and is the largest non-emergency medical transportation broker in the country.
The State of Maine decided in late 2023 to award contracts for MaineCare patients’ non-emergency medical transportation throughout the entire state to the Colorado-based company, creating a situation that would lead to a significant loss of revenue for both Penquis and Waldo Community Action Partners which currently serve patients in select areas.
The two nonprofits together appealed this decision, but on April 25, 2024, the Maine Bureau of General Services (BGS) ruled against them and denied their appeal.
With no administrative options remaining, Penquis filed a legal challenge suggesting that they were unfairly harmed by the state’s proposal evaluation process, which they allege did not live up to the state’s usual standards.
In May, the Superior Court ruled against Penquis, upholding the validity of the state’s contract with ModivCare.
Penquis has since appealed this decision to the Maine Supreme Court, further extending the legal battle over the state’s MaineCare transportation contract. As a result of this, the state has extended the existing contract agreements for another year.
“I’ve heard from numerous constituents with complaints that ModivCare is not sending necessary documentation, leaving patients stranded and struggling for reimbursement. MaineCare transportation complaints have increased exponentially since DHHS took these contracts away from local nonprofits,” said Senate Republican Leader Trey Stewart, (R-Aroostook) in a statement Monday.
“With ModivCare’s bankruptcy, DHHS needs to reassess this contract and consider returning to the proven model of partnering with our community action programs,” Sen. Stewart added.
“We keep hearing about serious issues with the state’s procurement and contracting process and here’s yet another example of that,” he said. “It seems due diligence was not performed on this company at all.”
“We also won’t have any knowledge about the new owners at the end of the bankruptcy process,” he concluded. “At the very least, the Mills Administration should reopen and rebid this contract and do it right this time for a change.”
“The patients that rely on MaineCare transportation services are our state’s most vulnerable individuals. They need compassionate and responsive services that ModivCare has proven they cannot provide,” said Sen. Marianne Moore (R-Washington), the lead Senate Republican on the Legislature’s Health and Human Services (HHS) Committee.
“The administration needs to ensure these patients are not left stranded amidst this company’s financial crisis,” she said. “Unfortunately, this is what happens when you put all your eggs in one basket.”
This past Wednesday, ModivCare filed for voluntary Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas.
According to Business Wire, “all of ModivCare’s service lines will continue to operate in the ordinary course,” and there is no expectation at this time that care will be interrupted or changed as a result of their bankruptcy filing.”
“ModivCare intends to close this transaction quickly by exiting the restructuring process early in the fourth quarter of 2025,” Business Wire reported.
