The bankruptcy of ModivCare, a Colorado-based transportation company contracted to manage MaineCare’s nonemergency medical transportation program, has thrust one of Maine’s largest public service contracts into uncertainty.
Thousands of low-income Mainers depend on nonemergency transportation to reach medical appointments for dialysis, chemotherapy, mental health care, methadone, suboxone, and other essential treatments. When ModivCare filed for Chapter 11 bankruptcy in August, those rides—and the health outcomes tied to them—were suddenly in question.
A group of state lawmakers gathered on Wednesday to urge the state to coalesce around a strategy to ensure that the financial crisis faced by the out-of-state company won’t impair transportation services low-income Mainers rely upon.
At a public meeting in Bangor, lawmakers from both parties warned that the state’s reliance on a bankrupt firm had created unacceptable risks.
“I’m not comfortable with a company that’s going into bankruptcy handling this very vital task for that much money,” said Rep. Amy Roeder (D–Bangor).
“What we’re getting in return is not quality service,” said Sen. Joe Baldacci (D–Penobscot), while urging the Department of Health and Human Services (DHHS) to rebid the contract and prioritize Maine-based providers.
Meanwhile, the Maine-based nonprofits who previously held the contract are also calling for the DHHS to re-issue the contract.
The same non-profits, Penquis CAP and Waldo CAP, sued the state after they were denied the most recent issue of the contract in a Request for Proposals (RFP) process state officials subsequently admitted was flawed and unfair.
Even though the state employees who handled the RFP admitted that the process improperly advantaged ModivCare, Penquis CAP and Waldo CAP lost their legal challenge.
Now, however, ModivCare’s financial collapse has raised new doubts about the company’s ability to provide the transportation services — valued at hundreds of millions of dollars over the life of the contract — and renewed bipartisan calls for an urgent and drastic fix.
With two of central Maine’s largest non-profits ready to provide the transportation services that they originally bid on, have historically provided, and were unfairly denied the contract to provide once again, the fix seems obvious.
Yet the Mills Administration has been slow to react and hasn’t indicated whether they’ll initiate the process to re-issue the MaineCare contract.
How Maine Got Here
The controversy stems from a 2023 RFP through which DHHS awarded ModivCare a 10-year, $750 million contract—one of the largest in state history—to coordinate transportation for MaineCare members statewide.
For years, the local nonprofits — Penquis Community Action Program (CAP) and Waldo CAP — had successfully managed this service in parts of rural Maine. Their joint bid to continue serving multiple regions was rejected in favor of ModivCare, triggering a protracted legal and political fight.
Penquis alleged in its legal challenge that DHHS ran a “lawless” and “arbitrary” procurement process that favored the Colorado firm. According to court filings, DHHS evaluators admitted under oath that they had no scoring formula, inconsistently graded identical proposals, and even copied and pasted evaluations across different regions. The under-oath testimonies effectively showed state employees shirking their responsibility to scrutinize RFP responses and cutting corners.
One reviewer testified that her scoring “was fundamentally unfair to the bidders,” while another said he simply chose scores “somewhere close to the middle” of available points.
The challenge highlighted other glaring problems with how the RFP responses were scored. Identical answers received different ratings, and ModivCare was credited for pandemic-related programs that Penquis had never been invited to join. Reviewers overlooked ModivCare’s past sanctions in Maine and ignored more than 370 lawsuits filed against the company nationwide.
Despite this, the Bureau of General Services upheld DHHS’s decision, prompting Penquis to sue in state court. When a Superior Court judge sided with the state, Penquis appealed to Maine’s Supreme Judicial Court, arguing the state had violated its own procurement laws.
Both Penquis CAP and its Waldo County peer are presently awaiting a for the state’s top court to set a date for the appeal.
Related:
- Augusta Lawmakers Question Maine’s Contract with ModivCare After Bankruptcy Filing
- Colorado Company Awarded Multi-Million Dollar Contract for Non-Emergency Medical Transportation in Maine Files for Voluntary Chapter 11 Bankruptcy
- Maine Senate Republicans Blast Mills Admin Over Billion-Dollar Contract to Bankrupt MaineCare Contractor
- Mills Admin Gave $1B Contract to Out-of-State Firm Now at Severe Bankruptcy Risk and NASDAQ Delisting, Prompting Lawsuit from Maine-based NGO
- Penquis CAP Alleges Maine Violated Procurement Policies to Award $750M+ Contract to Out-of-State Firm
Even as the lawsuit unfolded, signs of ModivCare’s financial distress were public. In early 2025, SEC filings showed the company faced potential delisting from the NASDAQ exchange after its stock fell below the required threshold for 30 consecutive days. Analysts pegged its bankruptcy risk at 57.5 percent.
Among the Maine media, only the Maine Wire noted earlier this year the potential ramifications of one of the state’s largest contractors going belly-up.
Despite the financial challenges, both the Mills administration and ModivCare have given every indication that they’ll continue on the course set by the original RFP award.
Even as ModivCare filed for Chapter 11 protection in the Southern District of Texas, the company promised to continue operations “in the ordinary course” during restructuring.
That assurance has done little to calm lawmakers.
“Due diligence was not performed on this company at all,” said Senate Minority Leader Trey Stewart (R–Aroostook). “At the very least, the Mills administration should reopen and rebid this contract and do it right this time for a change.”
Sen. Marianne Moore (R–Washington), ranking Republican on the Legislature’s Health and Human Services Committee, said the state had “put all [its] eggs in one basket” by contracting with a single out-of-state firm.
At a September legislative hearing, DHHS officials insisted they had “contingency plans” in place if ModivCare failed. Michelle Probert, director of the Office of MaineCare Services (OMS), testified that the company had met all performance standards despite its financial collapse. But lawmakers pressed for details about how DHHS would protect patients if the company faltered.
ModivCare CEO Heath Sampson told legislators that the company expected to emerge from bankruptcy later this year and blamed prior leadership for its financial problems. “The only way I am going to be able to build back trust… is with transparent data,” he said.
Still, bipartisan skepticism remains. “It’s no wonder people don’t trust this state when the state keeps cutting funding for the most vulnerable,” Rep. Roeder said at the Bangor forum Wednesday.
Lawmakers from both parties have urged DHHS to void the ModivCare contract and issue a new RFP—this time emphasizing local providers with proven track records.
Rep. Sean Faircloth (D–Bangor) argued that rebidding the contract “is consistent with Maine’s legal authority” and “a duty to act in the best interest of Maine people under the law.”
Indeed, the push to reissue the contract has overwhelming bipartisan support from lawmakers and virtually no vocal opposition from anyone except ModivCare, making the Mills administration continued inaction all the more confusing.
For now, ModivCare continues to operate Maine’s nonemergency transportation network, but its bankruptcy and the cloud over its procurement have left MaineCare recipients and the employees of Penquis CAP and Waldo CAP uneasy about the future.
What began as a bureaucratic RFP has spiraled into a test of Maine’s public contracting integrity—and of whether the state can protect its most vulnerable residents from the consequences of a flawed, out-of-state deal.
