InnovAge Conference Call Summary Company Overview - **Company**: InnovAge - **Industry**: Healthcare, specifically focused on value-based care for dual eligibles (Medicare and Medicaid beneficiaries) [2][3] Core Business Model - InnovAge operates a vertically integrated payer-provider platform delivering personalized value-based care to medically and socially complex dual eligibles [3] - The company takes full financial accountability for outcomes and costs across the full scope of Medicare and Medicaid services, with an average premium of approximately $9,500 per participant per month [4] Operational Highlights - InnovAge operates 20 centers across six states, with two additional centers under development, serving nearly 8,000 participants [5] - The company has invested heavily in scalable technology and operating infrastructure, enhancing payer-grade utilization management capabilities [5] - The focus is now on optimizing the platform for responsible growth, expanding margins, and leveraging data and technology [6] Financial Performance - In Q1 FY2026, InnovAge achieved a 7.5% adjusted EBITDA margin and positive operating cash flow on a trailing 12-month basis [13] - The company expects continued growth and margin expansion, with long-term potential for adjusted EBITDA margins around 10% [14] Market Position and Growth Strategy - InnovAge is the only PACE organization with significant scale and geographic diversification, positioning it as a partner of choice for health systems and communities [12] - The company is exploring joint ventures with local health systems to enhance care coordination and expand access [12] - There is a significant market opportunity for PACE programs, which remain underpenetrated, particularly among dual eligibles [11] Regulatory Environment - There is growing bipartisan recognition of the value that PACE delivers, which supports sustained growth of PACE programs [11] - InnovAge is preparing for potential changes in Medicare risk adjustment models and is taking a conservative approach to manage associated risks [41][42] Technology and Operational Improvements - Recent investments include the rollout of the Epic EMR and Oracle financial platform, aimed at improving quality, compliance, and efficiency [21][22] - The company is leveraging AI to enhance clinical decision-making and reduce costs [23][24] Enrollment and Acuity Management - InnovAge is balancing enrollment growth with acuity mix to ensure appropriate risk reflection and economic viability [27][28] - The company has successfully rebalanced its participant mix to maintain economic leverage while prioritizing patient care [28] De Novo and Acquisition Strategy - InnovAge is evaluating both De Novo center development and bolt-on acquisitions, with a focus on markets with large and growing senior populations [29][30] - The company has identified opportunities to acquire subscale PACE programs that are struggling to meet expectations [31] Lessons Learned and Future Outlook - Key lessons from recent De Novo launches emphasize the importance of strong community relationships and awareness of the PACE model [33][35] - InnovAge is well-positioned to leverage its investments and operational improvements to deliver quality care and create value for stakeholders [45] Conclusion - InnovAge's unique integrated model, operational discipline, and strategic investments position it for continued growth and success in the evolving healthcare landscape [15][45]