ModivCare Inc. (MODVQ) Earnings Call Transcript & Summary

Okay. I think we're going to get going. Good afternoon, and thank you for joining us for Modivcare's inaugural Investor Day, transforming connections to care. I'm Kevin Ellich, Vice President and Head of Investor Relations. It's great to engage with all of you live and in person as well as those attending our meeting on the webcast. I want to thank all of you for your interest in Modivcare and for taking time to join us today to hear our story and to see how much the company has transformed over the last couple of years. As many of you know, I was an analyst for about 20 years sat where you are today and I couldn't be more excited to be part of this company. One quick housekeeping item, for those who need the WiFi, the password is simple22. Just more housekeeping. Everyone see the forward-looking statement, we're going to make some non-GAAP financial -- provide some non-GAAP financial information and make some forward-looking statements. We have an exciting day planned for you. Our meeting is really divided into 2 sections. First, Dan Greenleaf, our President and CEO, will kick us off with some high-level comments and an overview of our supportive care platform, followed by Ilias Simpson, President of Modivcare Mobility; who will do a deep dive into our nonemergency medical transportation business. Next, Mia Haney, COO of Personal Care Services; and Jessica Hylander, COO of remote patient monitoring, will walk you through the Modivcare Home business, followed by Walt Meffert, our Chief Information Officer, who will get into our tech-enabled platform. Following Walt, we'll have a Q&A session with these presenters followed by a short break. The second part of our meeting will start with Brett Hickman, our Chief Commercial Officer; and Robert Pittman, SVP of Government Affairs, who will get into our growth strategy, which includes bundling, cross-selling and value-based care. And finally, our CFO, Heath Sampson, will finish the meeting with our financial outlook followed by a second Q&A session. Again, we have 2 Q&A sessions, so please keep your questions focused on each part of the meeting. What I'm really trying to ask you guys is save all your financial questions for Heath after he's done speaking. As a reminder, we are having a reception at our headquarters following this meeting. That will start at about 05:45. And now I'd like to play a little...

Just so everybody knows that's a short -- we made it it's short -- walk across the bridge here or we've got a shuttle. So and there's incredible views of the front range. So it's a beautiful day to day. So I'd strongly encourage it.

I think we all want to stretch our legs after 4 hours of sitting. So good idea. Now I'd like to play a video that provides an overview of who Modivcare is and what we do. [Presentation]

And now I'd like to introduce Dan Greenleaf, our President and CEO.

Okay. Well, first of all, I want to thank you all for being here. I know this has been a while. There's a few of us that kind of awkwardly hugged each other because it's like, oh, I haven't seen you in so long. That's what you look like. So -- but I appreciate you making the effort. And I know we've -- most of us haven't been traveling for periods of time. And I know COVID is still running around, we had -- unfortunately, a couple of people canceled because they got COVID. So we know it's still. And I understand there's also airlines that are working as efficiently as they always have as well. So listen, I want to share with you a few things today. One is, I think for those of you who've been following the company for the last couple of years I've been here. We laid out what -- what we felt were going to be the strategic pillars of the organization. And what I would say about each of these categories, and I'll walk through them is that we delivered. And I think about the right people in the right seats, and I've got a couple of slides here that give you an overview of just the transformation that's occurred with the personnel in this organization. There's also been significant transformations with our Board of Directors as well, which I really feel that to have a great company, you have to have a great Board, and we've got extraordinary board. There's been on the voice of the customer. I think that was something that as we thought about who we wanted to be in the future, it was something I don't think the company historically had put a lot of emphasis on. And we've done a lot of work here and some of that work has been through client advisory board. Some of that work has been through transportation advisory councils. Some of that work has been done through caregiver councils. But it also shows up in our Net Promoter Score. And if you look at our -- for example, and Jessica will talk about this, our Net Promoter Score, for example, in our RPM business is somewhere in the 87% range, 86%, 87% range. So that's the remote patient monitoring. Our member experience scores with our transportation business is in the 75% range. And the reason I bring that up is both those by anybody's standards are world-class. And so although we still think there's still lots of work to do here, there's been a lot of work done as well. The other thing that we're really focused on addressing given the communities that we serve are digital divide, which you'll hear I think as time goes on here, particularly around social terms, you're going to hear more about that. You're going to hear more about digital literacy and the issues that the patient populations that we serve have. And again, as we think about our -- the evolution of our business model, a lot of this is around how do we address the digital [ divide ], how do we address digital literacy. And ultimately, how do we best meet the patient where they are, so this notion of this high-tech, high-touch solution is not going anywhere. But this all comes from all the work we've done in the voice of the customer. Transformational growth. We've acquired 6 companies in 2 years. We bought 2 personal care companies, we bought 2 remote monitoring companies. We acquired 1 NEMT company. We bought UnitedHealthcare's NEMT business, which is roughly about $200 million at the time. And then we've also acquired a best-in-class technology product called WellRyde, which is the gold standard for transportation management systems. So we've been active on the transformational growth side. When it comes to kind of the single repeatable model, we see a significant opportunity and have seen significant opportunity to standardize our processes, significant opportunity to drive out way, significant opportunity to reduce variation. I look at our call center and Ilias will spend some time talking about this. But when we got here, the service levels in a call center would range anywhere from 55% all the way up to 75% and back down to 55%. And through standardizing processes, looking at what are the best models to adopt. We've been able to achieve service levels, for example, in our call centers above 90% consistently, which again, I'm going to get so much trouble for that. Somebody gave that to me. So if she sees me on this video, but that's a whole another story. And then Walt Meffert is going to talk about the technology platform. We're spending $100 million in technology alone this year. We're doubling down. There isn't a company out there in our space that's putting this kind of resources. When I first got here, we were spending $25 million. But this is the kind of spend that we needed to do in order to address our tech debt, but also to enhance our tech stack. And I would say that at this point in time, we're moving from a place of where we were doing catch-up work to now we're doing work, which I would describe as tech stack was forward-looking work. So there's a lot of things going on there. And then the rebranding. You've got a taste of some of that just now. But when I look at rebranding, it's the bigger issue of rebranding isn't named, isn't purpose vision values. It's really about how do you change a culture. And so when I think about the cultural changes we've made is we've made one that I would share with you is much more member-centric. I will also share with you, it's a culture that's much more accountable. And so when we talk about accountability, we'll move to the next slide. And what I would say to you about this is a couple of things. Number one, we've delivered on 9 quarters in a row, and I don't think that trend is going to change. Accountability is by 2025, we see as a baseline. We'll have a company that's delivering $3 billion of revenue and $300 million of EBITDA, which is for those who are paying attention to kind of where we're tracking right now, that's a 50% increase. Obviously, there's significant opportunities given our free cash flow profile to deleverage the organization simultaneously. So when you think about a predictable business in increasingly uncertain times, this is a good business to invest in. And because of the predictability, because of the consistency, because of what we've been able to do. And just keep in mind, when I did join in '19, I think you know the company was $52 million of EBITDA. We're doing approximately that on a quarterly basis now. So there's -- and we're going to continue to build on that. And so anyway -- so we built out the preeminent supportive care platform. In the next slide, I'll walk you through. There's nobody close to us. We've got 32 million members we serve. On the remote monitoring, we've got 250,000 -- 220,000 -- 230,000 whatever, 230,000. On the -- we've got 30 million hours that -- we essentially said 30 million hours that we service from a personal care standpoint. And so what does that all mean is we've got opportunities for data collection that are second to none. There isn't -- there's nobody else out there who has this many data points. And as Brett is going to talk about this, our move to value-based care. There's -- again, there's nobody who is in a better position to do that than us. And if you talk to the payers, they don't have the expertise or the assets to address the last mile. And again, we're in a very unique position to really help close that gap for them and get Brett is going to spend some time to talk to you about this. But again, $3 billion in revenue by 2025, $300 million of EBITDA. That's a 50% increase over where we're tracking at this point in time. Obviously, excellent free cash flow, plenty of opportunities to delver. And yes, so I think we're in a really unique position going forward. So the next slide is just the leadership changes. It's -- again, for those of you who have followed me at other companies, this isn't something unusual. The blessing I have is that people I've worked with historically want to work with me again. And there are several people in the room, whether that be Grover or Jon or Jody or Walt and we're very fortunate in that respect. And essentially, everybody on this slide is either new or has an evolved position, where, for example, when Robert Pittman, when Robert was a Director or something like that when I joined and we quickly promoted into a Senior Vice President. And we've got Scott Kern, who's done just an extraordinary job in the area of corporate development, really spearheaded all the acquisitions we've done. But -- so those are kind of the legacy employees, but they're extraordinary. But the point is, listen, we've done -- the reboot has been done. We're ready to move forward with this team. And the other -- I wouldn't call it a reboot, but this Board of Directors is bananas. I mean this is -- we certainly upgraded it with people like I don't know if I call it upgrade, we've enhanced it, I would say, with people like Garth, with people like Stacy, people like Rahul, who had worked at Google, Amazon and Delta Airlines, respectively. But listen, we've got an administrator of CMS on the board. We've got Chris who had spent a lot of time at LHC. We've got David Coulter, who was a Vice Chair at Warburg and was also the CEO of Bank of America. We've got a partner from Deloitte. And we've got Todd, who has led an investment bank for a number of years. And then Frank, who was at GSK and -- but it's just an extraordinary board. And again, from my perspective, and for those of you been close to boards, this is about as good as it gets. And again, they've been instrumental in giving us the freedom to do what we've done over the course of the last couple of years. So with that, -- so we've built out this, again, this one-of-a-kind supportive care platform. We serve 32 million Americans, 10% of the U.S. population. I don't really know another health care company that serves that many people. I mean that's -- there might be 1 or 2 more, but let's say, I mean, it's a big number. This is a very, very carefully curated organization. And so if I think about the 2 personal care companies we bought or the 2 remote monitoring companies we bought or the 1 NEMT company that we acquired or what we've done with the technology, we have been very conscientious about what products we needed to build a one-of-a-kind preeminent social terms of health company. And the other thing I'd point out, and I think this is really important because we've caught some of the downdraft of home health. We're not a home health company. We -- typically, home health has members on service anywhere 30 to 90 days. We have members on service on average 4 years. We've actually received $6.5 million of reimbursement increases this year. I think you all know what happened over the last couple of weeks, what's happening in home health, we are not home health. And I just -- and I don't foresee that changing. We don't have that pen stroke risk because these decisions by and large are being made at the state. And the state by and large, sees personal care as an incredibly valuable asset. And so they're inclined to enhance reimbursement. So we're just [indiscernible] 5 out of 7 states we're in we've seen reimbursement increases this year alone. So again, really well positioned to continue to address this -- these markets. And again, I just wanted to highlight the differences. The markets we're in right now are massive. We've got a $55 billion market that's growing to $100 billion in personal care. Nonemergency metal transportation is a $6 billion market going to $14 billion. Remote patient monitoring is $9 billion growing to $15 billion and then meal delivery is $9 billion growing to $15 billion. So huge market, lots and lots of data collection opportunities, again, as we think about the evolution of the company moving into value-based care. We're really well positioned, not only from a market standpoint, but also from a data collection standpoint. Platform, unparalleled. No one has this level of exposure to as many states as we do. NEMT and remote patient monitoring, our meals business is a national platform as we -- as that continues to build and grow. Obviously, the personal care, we're in 7 states right now. But we see opportunity to continue to expand that platform. But again, it's an unparalleled platform. We're either 1 or 2 in every service that we're providing at this point in time. And I would also say, and Brett and Robert will talk to this, there's a lot of white space. This is -- although we've got a significant profile right now from a geography standpoint, there's lots of opportunity to grow it as well. And again, not just what you could grow in these geographies, but obviously, the markets are growing pretty significantly, too. So this is kind of the -- so why supportive care because 90% of the dollars or 90% of the outcomes are driven by issues related to things outside of medical care. Yet we're spending 60% of our dollars on medical interventions. And I think there's a lot more awareness around what the future is in health care. And I don't think anybody would question that. Supportive care is going to play an increasingly important role in the value proposition and the outcomes, but particularly in the areas of data collection, data insights as well as value-based care. So yes, we own the last mile, but we own the first mile too because we're the ones that are bringing people to their appointments. So again, this was one of the things that I think we're so uniquely positioned is we're owning the last mile, but we're also owning the first mile too. And again, you think about our caregivers, 30 million hours, 30 million hours of opportunity to collect data. We do -- we have 32 million people that we service. So you think about that from a transportation standpoint, from a data collection standpoint. We've got 230 hours with -- 230 members in our remote patient monitoring service. So again, that weren't -- so -- and Jessica will talk about this. Just for the record, remote patient monitoring, let's say we get 10 calls a month, 9 of those have nothing to do with a clinical intervention. They are just giving us information. Hey, I could really use a hot meal. I could really use a personal caregiver. I could really -- it would really benefit me if somebody could pick me up and take me to their transportation provider. And so this is kind of another hidden asset we have that as I think about our ability to kind of manage dual-eligible patients is that our remote patient monitoring, it will unlock additional value. And why do we do this? Because this is what our members want. Our members want to surround sound. Why do we do this? Our payers want surround sound. Why do we do this? Our states want surround sound. This is what they're asking for. They're saying we want to manage these patients holistically. They want somebody who can manage these patients holistically. And there's one other person this matters to, the case managers. And the case managers are kind of that -- they're kind of that intersection of the decisions that were being made up here and what happens actually in the field. And the case managers don't want to deal with 6 remote monitoring companies, 10 meal companies, 12 transportation companies, right? They want -- or 8 personal care companies. They want to deal with 1 company. They want a one-stop solution. And so again, why do we do this? Because this is what -- when I talk about voice of the customer, our customers told us this. But there's only 1 company who's actually done this now. And there's only 1 company who has actually taken that advice and is doing something about it. And again, this, again, speaks to this owning the first mile and owning the last mile as well. I just put this in here because I -- we shared this before, but I do think it's worth noting that we broke the company apart after we did the acquisitions and after we launched the meal business, we've got personal care, combined with remote patient monitoring, combined with meals. And then we have our NEMT business. And we have 2 heads of each of those businesses. We also have 2 Chief Operating Officers here today, 1 who's responsible for our personal care business and the other is responsible for our remote monitoring. So at the end of the day, let's face it, care is moving to the home. Modivcare has built out a one-of-a-kind, one-stop shop that's extremely well positioned from data collection and ultimately driving towards value-based care. And then the performance is there 9 quarters in a row. We're doing in a quarter what we did in a year when I first joined, I think when I talk about the $3 billion and $300 million, that's a baseline. I think we can do a lot more. And again, there's opportunities to obviously delever. The company should produce very strong free cash flow. And again, in an uncertain environment, this is a highly predictable company going forward. So with that, I would like to turn it over to Ilias Simpson, President of our Mobility division, who will talk about what he's doing in the mobility area. Thank you.

All right. Good afternoon, everyone. As Dan said, I'm Ilias Simpson, President of Mobility division. I met a few folks already and a lot of folks are asking who are you. So just for -- by way of background, I have only been here 2 months, but I've been able to lean in, get out in the field, really spend some time with the executive team. Spending a lot of time with the folks in the field, getting to understand the business, and I couldn't be more impressed. I've got over 15 years leading in working in service-based organizations, mostly around transportation and logistics. And I can tell you that Modivcare is positioned to really hit a next level when it comes to our NEMT business. So really excited to be here. So as Dan mentioned, 89% of health outcomes are related to SDOH. 60% of a person's health outcomes can be determined by ZIP code. So what that means is that from a transportation perspective, we play a key role in providing access to care. But when you dig a little deeper, it's not just about the access, it's about the ease of the access. When you look at what stops people from getting to their appointments, it's not just the lack of transportation, but it's the ease of use of that transportation. And that's where Modivcare comes into play. And what we're really focused on is providing that seamless experience that's very member-focused, and we want a perfect trips for our members. We want them picked up on time, delivered on time to the right place with the right provider and having a safe, reliable experience. So I'm going to cover a few themes today. First and foremost, differentiation. Why is Modivcare unique, right? Like what separates us apart from the competition, where we stand in the market and how that's going to help lead to further success? Again, I mentioned that we're a service-based organization. And I spent a lot of time in service-based organizations, and it's all about execution. You've got to perform. You've got to perform for your members, you've got to perform for our clients. And so I'm going to talk about what we are doing to perform, how we have performed, how we've improved, now we're going to continue to focus on that improvement and that operational performance. And then we'll wrap up with how those 2 things lead to growth, right? When we perform, when we pick people up on time and we have the right member focus, we will grow. All right. I think something to start with, and most of you are probably aware, but if you're not, NEMT Medicaid benefit was codified in law back in 2020, huge part due to Robert Pittman. So -- but what that means is that this is a benefit that the states must provide. Now there's various ways in which they can provide that, and I'll talk to that here in a minute. But this is a business that's not going anywhere. In fact, there's a greater appreciation for NEMT than there ever has been. Our payers in states understand that NEMT is a preventative service. By us getting these patients -- these members to their dialysis appointments, getting them to their preventive care appointments, we are saving health cost overall, and we're providing better health outcomes for these members. So again, NEMT isn't going anywhere. And if anything -- and Brett will talk to some numbers where you'll see that the penetration and the growth in NEMT is there, and it's going to continue to be there. And as Dan mentioned, it's the foundation. And it's our foot in the door with these states and these payers to ensure that we can get that full suite of services with these MCOs and payers. All right. So specifically, when it comes to Modivcare's NEMT business, we are still primarily from a revenue perspective, a Medicaid business. We absolutely are seeing growth in MA. But when you look at our business, the majority of the revenue still is Medicaid. So about 85% of our revenue. Again, going back to the states and payers, about 60% of our revenue comes from MCOs and the other 40% from the states. In terms of our contracts, again, heavily capitated PMPM business, which is a good thing, right? We're taking risk, but with risk comes opportunity. So again, we are still a heavily capitated business, and we don't anticipate that changing. Dan already talked about some of the numbers, but again, over 32 million lives managed. We've seen great member expansion over the years. We expect to see that continue, both from winning new contracts as well as, obviously, more members coming on board to these plans, but we've also seen margin expansion. And we feel very confident that we can maintain that margin as we continue to grow. We'll talk about this a little bit more in detail and why it matters, but we are, by far, the largest when it comes to the NEMT market by a factor of 2 or 3. And again, sizes and everything, but the scale that comes with that absolutely matters in this business. So as I just said, the differentiated factors, so again, the scale right? So why is being the largest matter? So when you think about working with these MCOs, Modivcare is positioned where we can be a national partner, right? We can work with you in any state across the country. And we've got decade-long relationships with states, with MCOs. We are the largest or the majority provider for several of the largest MCOs. So again, we provide that national scale. In addition, we have the deepest transportation network in the industry, right? So not just from a provider perspective and the number of providers we have in our network, which is well over 5,000, but also in terms of our ability to provide multimodal. Again, and I'll dive into that a little bit further. But in terms of mileage reimbursement, mass transit, those higher levels of service around stretcher, even air, you believe it or not, even air, we provide those services. So when it comes to the depth of our network, it's unmatched. And I'll talk a little bit about that further. And then as Dan mentioned, we've invested in technology like no one else, and we're going to continue to do that. We understand that the landscape is changing. Consumer expectations are changing. So our members' expectations are changing with it. Of course, we have to manage the digital divide. However, there is still a need for us to continue to enhance our products and enhance our services to provide a better member experience. So we are absolutely focused on our tech and we feel like we have a platform that allows us to provide that great member experience, but also to streamline our internal processes and automate processes. So again, and I'll talk a little bit about that later, and Walt will dive in deep there. So just a little background on the mix of services within Modivcare, this is all as a percentage of rides. So when you look at our treatment types, it's actually pretty evenly distributed amongst our treatment types. We do have -- often folks think we're kind of solely focused on dialysis, and that is a big portion of our business, but we do other things as well. We have everything from physician visits, substance use, mental health. So we service all types of treatments. About 50% of our orders or our rides are standing orders. So what a standing order means, again, as you think about that dialysis patient, they're going to the -- to get their chair appointment 3 days a week, Monday, Wednesday, Friday, to set appointment for the foreseeable future. So we're able to set that patient up on a standard order, give them a set transportation provider, work with the facility, et cetera. That still is about 50% of our total rides. And it's not just dialysis, we do that for chemotherapy. We can do that for other services as well. In terms of the service level type is what we call it again if you think of a service level, you have like what would be an ambulatory service level, so just somebody who can move we do the door-to-door service, but they can move. You have a wheelchair service level. And as I mentioned, we've put more of a focus on our multimodal network. So we're up to 20% of our rides are either mileage reimbursement or mass transit. And if you dive in deeper in a place like Philadelphia, over 60% of our trips are done through mass transit. And in West Virginia, over 60% of our trips are done through mileage reimbursement. So what that means mileage reimbursement again is either a member who drives himself or has a family member drive them, and that's really important. What we see is more and more folks maybe aren't comfortable getting in a car with other folks for transportation. So they're more comfortable with the family member ride them, makes them feel more safe. So we offer that. Same thing with mass transit. You often see people who already use mass transit on a day-to-day basis. So for them, it's more convenient with as part of their daily life to leverage mass transit. And so we want to make sure that we offer those options. We also offer rideshare, right? For us, rideshare serves a pretty specific purpose right? Unfortunately, in our business, things happen. And every once in a while, we need to recover a ride. So remember that was expecting a ride. We're tracking the ride. We see that the ride is not going to be available. We're able to work with our ride share partners and provide a ride on demand. So that's about 8% of our rides today. And then the other, which I mentioned, that's those higher levels of service, stretcher, ambulance, some of those other things. All right. Again, I mentioned service business, and I'll keep talking about that because for me, as I've joined, the imperative is very clear, we need to continue to improve the quality of our service while maintaining or declining unit cost. And he's going to talk a little bit about that later. But we have to continue to provide a great experience while managing our cost. And the way you do that is you focus on operational performance. And we have been doing that, and we'll continue to do that. And Dan referenced the example of our contact centers earlier. What we saw in our contact centers 2 years ago was 61% SLA performance. What that means is SLA is a service level agreement. So if you think about what that means is we have an ASA target, which is an average speed to answer. Got to answer 85% of the calls within 30 seconds, it gets really complicated. I know. But we were only hitting 60%. And this month, we'll hit 97% on our ASA SLA. So again -- and what that was is that's the focus, getting the right people in the right seats, putting the right processes in place, standardizing, creating that single repeatable model is what drives that. On the transportation side, digitization, very similar story, maybe even a more impressive story, where we were nearly 0% digitized as a network 2 years ago. And so for us, just to kind of explain what a digital trip means a digital trip is basically a triple we can capture breadcrumbs. We can see the GPS location of the vehicles, it allows us to track those vehicles. So we're only 6% in early 2020. Today, we're averaging over 75% digital trips across our network. So significant amount of rides and a significant improvement. Again, all helping us to provide that better member experience but also to be -- to provide a better operational experience and reduce cost and make sure that we're hitting what it is that our customers need from us. I want to dive a little bit deeper into the contact centers. So this remains a great story. So we are transitioning from contact centers to member care centers. So what does that mean? Historically, our contact centers were about intake services. You call in, you make a reservation. That was the focus, right? Today, we are transitioning to a full member care experience in our contact centers. So 1, you can contact us multiple ways. You can call us, you can go through the app, you can go through the website. When you get in touch with us, we're going to make sure that the person you engage with understands what you specifically need. They're going to evaluate what the best plan for you is, what the best mode of transportation for you is and make sure that they understand who you are and what it is that you need from us. In addition to that, they're going to be thinking about what other services that we could offer you, right? So as you think about and Brett's going to dive into cross-selling and bundling, as you think about our ability to connect with a member through transportation, but ask that member if they need meals, ask that member if they need personal care. Again, going back to the data, we're going to be able to have this full member profile within our member care centers really focus on making sure that every member has a unique experience, that's the right experience for that member. We're going to do a lot of that through technology. So as we think about our investments in technology within our care centers, IVR, which is interactive voice response is a big part of our business. We're going to continue to increase that. We're going to continue to increase our HIPAA validation at the initial call, and we're even investing in voice recognition so that we can know who you are just through the sound of your voice. So as we start thinking about where we're going from a technology perspective and making sure that, that member experience is great, we're going to continue to focus on that. And again, all of this supports our multimodal strategy as well in terms of being able to get members the ride experience, whether that be miles reimbursement or mass transit, that's done through these care centers and understanding what it is that member does. I mean, again, hey, do you ever take the subway, right. Yes, I do it every day. Okay, well, these you know we can get you the subway pass. We also have to transform our relationship with our strategic partners, our providers, right? Again, historically, not to dwell in the past, it was very much a vendor management relationship, and we are moving towards a strategic partner. A couple of great examples of that is one is our champion program. So our champion programs where we partner with some of our key providers, and we can maybe match them up with a facility and they handle all of the trips out of that facility or maybe we match them up with a specific zip code or market, and they handle all of the trips within that zip code market. That does several things. One, that gives that provider consistent, reliable volume gives that facility a familiar face and a familiar provider. And it also gives that member a familiar face and a familiar provider. So now everybody knows what to expect on both ends and that experience could be much more seamless, much more consistent and much more repeatable, we also are moving towards to more regional and national partners. So historically, we're very local in our transportation provider network, which isn't a bad thing because you do want to be community-based and you do want to have people who understand that community, and that's still going to be important, especially in maybe some rural communities, but there are opportunities where we can have regional and national partners. And a great example of that is Provado. So for those who don't know, Provado is our T&C. And T&C is kind of a fancy legal term for an Uber or Lyft type experience. So basically, it means you use private vehicles to provide the NEMT services. And so we have Provado, which Modivcare owns that we are able to use on a national level. For example, we just -- we primarily started with them in California. We've recently rolled them out to Florida, Ohio, Georgia, and we're looking to continue to expand that service. But -- and I'll talk to a little bit later, but we have some examples where we maybe specifically struggle in an area, and we were able to use some data, see what was happening and recognize that Provado could be a good solution there. Another great example is our Modivcare Academy. So we just recently had our are our second Modivcare Academy in New Jersey. I was there as well as Dan and some of the other team, and I'll tell you it was incredible. So our academy is where we bring out some local transportation providers. So in this situation, those folks who serve New Jersey. So we brought out a team of transportation providers. We also got the state of New Jersey to attend this. And basically, it's a 2-way education session. We're educating them on what it is that we do, where NEMT is going. They're educating us on what they're experiencing, giving us feedback on what's happening, and we're able to really think about how we can better serve our members and better serve each other to continue to drive efficiencies and it's powerful. And again, there was feedback for the State of New Jersey that came out of that meeting as well. And so having them participate was fantastic. We've also, as Dan mentioned, started our Transportation Provider Advisory Council. So that's a 9-person council that we meet on a quarterly basis. I also meet with those members one-on-one. And again, it's an opportunity for us to get feedback from some long-standing partners on what it is that they're experiencing, where they -- where we can help them. We've seen some huge improvements on credentialing. We've gotten feedback on our technology, on our billing and all of these things help to make sure that everybody has a better experience. We were also able to share with him some feedback that we got from our members in terms of what was important for our members. Simple things like giving the member your name, making sure the member buckles their seatbelt, right? All of those things really contribute to a positive member experience. And so these forms allow for us to share that with our transportation providers. And we've seen huge jumps in our NPS surveys that we get from our providers really across the board. And I read some comments literally yesterday where one of our providers went out of their way to share how much they appreciate that we've changed from that vendor management to that strategic partnership model. So again, since I've joined, again, being an operator and coming from a kind of service transportation background, I'm obsessed with on-time performance, right, and really all of our performance metrics. And so for me, the way you ensure that you meet those metrics is you've got to leverage data and you've got to dig deep. And so in our business, we manage typically at a state level, but that's not enough. You've got to get very local. You've got to understand what's happening in the zip code. You've got to be able to predict where you may have issues. And so we've developed some tools that allow us to do just that. We look at everything from onetime performance to where we didn't have vehicles available to where it may be we're getting member complaints that are similar and we dive in at that local level to make sure that we can action that and provide the right experience. This is an illustrative we have heat maps that literally tell us where we have opportunities and where we're going to have issues. We can look at the amount of trips that we expect to do in a certain area over the coming weeks and whether or not the vehicles that we have in our network and the drivers that we have in our network is going to be able to cover that. So again, being predictive and making sure that we provide that great experience. And this is where we saw that specific example where in Florida, we had some challenges in some rural markets and we just couldn't find the TPs. We just couldn't find them. There just wasn't enough population density, et cetera. So what we did is we got Provado engaged. And again, they were able to stand up from 0 network of providers and start servicing that and servicing it at 90% above on-time performance. So again, this provides us a level of detail and sophistication that we haven't had in the past. And we're going to continue to evolve on that and we continue to invest in that. All right. So what does this all mean? So again, we talked about the size and the depth of the network, right? Nobody else has it, period. Like we're the largest, we're the deepest and that matters. But that we're not going to rest on our laurels there, we're going to continue to invest in technology. We're going to continue to advance our tools, and we're going to continue to modernize our business to make sure that we're focused on the member. That member-centric approach that Dan mentioned, we understand that that's what our states and our payers want. They want us thinking about the member. They want us thinking about overall health cost. And so we are going to be very focused on the members' needs and what it is that, that member is looking for to continue to provide the level of service that our clients expect from us. And when we do those things, when we pick people up on time and when we provide a great member experience, we will grow. We will win new contracts. We will expand with our current contracts and we will grow and we will win. So with that, I'm going to pass it off to the home team. But first, we're going to share -- the home team, yes, we'll share a video from our personal care team. [Presentation]

We do quarterly off-sites, and we go into different markets. And we meet with customers, we meet with team members. We meet with patients, we meet with, in this case, caregivers. And this lady just totally blew us away. And so we thought it would be useful for others to hear about her because she's so extraordinary. [Presentation]

Well, Cheryl, a special person, and we did meet her -- she's tough, too. She has that right balance. But a point that you'll see there. I get this question from a lot of you -- she works here and she's committed here. She's not going to go to McDonald's. She loves her job and his committee. A lot of it totally is because of what me and her team have done. So recruiting and hiring people like her is what this is all about, and that's a big focus for us. So first, welcome. It's good to see many of you for the first time behind the screen, and I look forward to later in the afternoon as well. I'm excited to kick off the home presentation. For me, since I've been here over a year, we've made these acquisitions really on late 2020 and the last one here, kind of fall of last year. You think about the opportunity in the home, health care into the home. But again, it was different, supportive care into the home. And we know now and we'll talk about this supportive care changes outcomes. We know how important that is. So we were just in Cincinnati last week, and we were going through all the priorities. The beautiful part about this there's a lot of priorities and everywhere you go, what's the best place to go. So these assets we have and the talent that we have, I'm really excited to introduce this. So similar to what Ilias did, what we're going to talk about here is what is the business, but then specifically what are the differentiators? Scale and density. Density matters in the personal care business. one-stop shop. You hear that all the time, one-stop shop is important to our customers. It's important to our members. And it really allows us. When we get this right, the value we get, you're going to see the revenue synergies that we get out of that as a one-stop shop. Member experience extremely important, but member engagement in the home business, especially is really the difference for us. Execution, execution, extremely important, Dan talked about in his pillars. It's at my core, I can tell you it's at this team's core and specifically within personal care, recruitment and retention, recruit and retain those ladies like Cheryl. And then the other item, which is really exciting having all else together is how do we leverage this data to improve those outcomes. And when we do, when we get that right, the durability around our recurring revenue is going to be strong. And that leads us to in the home business, growth, 7% to 9% in our personal care business. On the RPM side, mid-teens, and that's all on an organic basis. A big part of that is just selling what we have. In addition, a strategy that we haven't done much on the personal care side, we just can open up offices, de novo offices to grow. The point is there's a lot of organic opportunity in the home business. And then in addition to that, we also have meals. So Dan and I have said this a few times before in some of our largest payers, when they came out, what's the main focus of MA for them, meals, transportation, personal care. And that was even after we had it together, too. So the point is this home business, I'm excited about it. And now I'll turn it over to the people that really know what they're talking about. Let me introduce you guys first, sorry, I apologize. Most importantly, see the awkward look on their face. What are you missing Heath? Well, again, we spend a lot of time in -- so I'm lucky, we're lucky to have Mia here. She's been in the business for 14 years. She came when we made the acquisition back in 2020, and that's where she was at Pennsylvania, in Pennsylvania Caregivers America. Not only is she committed to helping Modivcare grow, she really is committed to helping this industry change. And that's why she was past President of the Pennsylvania Home Care Association. So a lot of experience, I look forward to having her talk about what she's going to talk about. And then also on the remote patient monitoring side, we continue to learn about this business. I tell you every month that goes by, I get more and more excited about this opportunity because it's so different. And because we have this connection into people's home, payers don't even have this connection. We have connection to people and we get 10 hits of the button, 9 of them are a chance for just engagement. So Jessica Hylander, who's been around at this business, she came to VRI when we bought VRI again, back in the fall. And VP of Quality, Process Improvement. In addition, and this is wonderful for us. She had 7 years at First Transit, another transportation company. So Ilias and her she get together a little bit more, but yes, so the point is here, it's just another talented person in how we bring these assets together. So obviously, she has strong operations experience, but critical, and we're learning, especially as she also owns the meals business who credentialing and regulatory background is really beneficial to us. And then lastly, and I've seen this across every field visit that we do, the ethos of these 2 professionals as well as the people they work for, focused on the member is incredible. And then on top of that, their experience as professionals bring it together is why we're continuing to win in this business. So now with that, I'll turn it over to Mia.

Thanks for keeping me on my toes. Thank you all so much for being here today. I'm really excited to talk to you about the way that Modivcare home is transforming supportive care services and how we deliver it to our membership. We really have a unique opportunity here to impact those social determinants of health that we see every day challenging our membership, and we have a perfect foundation to drive meaningful outcomes for these patients. So as everybody has seen this graphic before, we're going to take our individual Ruby here, and we're going to bring it to life to really illustrate what Modivcare Home means to Ruby. Ruby is a 71-year-old. She lives alone and is a chronic diabetic with frequent complications. She is a member of a Medicaid managed care organization, and she relies heavily on assistance with activities of daily living. Her HbA1c levels are around 9, which is high, and she has had hospital admissions in the past from diabetic complications. So Ruby is the perfect example of a member that Modivcare Home could support. So let's talk about Ruby's current experience and what her experience looks like in a Modivcare estate. Her current experience is really complicated by a fragmented provider experience. What we mean by that is that at all 4 stages of her current trip from the time that she gets connected with the managed care organization to the time that she receives her services. She's being presented with lists of providers to choose from. Even in Pennsylvania, to get to that MCO, step 1, you're already picking between 3 managed care organizations and Ruby has to make that decision. Then she is going to be connected to a case manager. And that case manager could be somebody that is employed by the plan, but it also could be a third-party case management company. And so once again, Ruby is making decisions about who is going to case manager care. Then she gets connected to all the services that she needs. And that case manager is presenting Ruby with customer choice, meaning that Ruby needs to make a decision about which provider is going to provide those services, each one of them. And as Dan mentioned before, we could be talking about upwards of 10 providers for each one of those services. And so you can imagine, if you're thinking about your mom or your grandmother Ruby is totally confused and overwhelmed by the time she gets her services. And a lot of times, when she talks to us, she'll call us the name of her RPM organization or she'll call us the name of her hospital because she has no clue who's coming into her home because she's seen too many names and the system is really complicated. So what Modivcare brings is a state of clarity for Ruby. It starts to solve some of these complications for her, and it creates efficiencies throughout the process. So we are still engaging with that MCO plan and payer. They are still assigning that case manager who's responsible for aligning Ruby with all the services she needs, but we're starting to take that complicated provider network and we're making 1 point of contact for Ruby, where she makes 1 call when she has to put services on hold because her daughter is in town and she doesn't need services this week instead of making 5 phone calls, which, by the way, Ruby be making those calls and so with the case manager. And so this complicated fragmented world, it doesn't just exist at the start of care. It follows Ruby throughout her whole continuum of care. And so when we talk about driving efficiency, the efficiency benefits keep coming. So for us, this is about efficiency for the case manager. It's about efficiency for Ruby, but it's also about aligning provider motivation. And what that means for us is that we're looking at Ruby holistically. So when a personal care at is in that home, they're thinking about Ruby's health outcomes. And they're thinking about it because they are aligned with all of those other services that Ruby currently receives. We become more accountable to one another, but we also become a real player to the plan in helping to drive real good outcomes for Ruby. What it also does is it gives us better actionable data. And it's better data because it's consolidated data and because it's data that we could share not only with the plans, but that we could share with Ruby's PCP, and her family and with each other so that we're driving meaning for Ruby. So what does that mean? Perfect example is that, that personal carriage is going into the home and realizes that Ruby doesn't have the food supply that she used to have when she first started serving her. And so she's starting to now connect with a case manager today that would be calling out to some of those other service lines to say, what's going on? Does Ruby have access to a food benefit? Is something going on with that provider today? Instead, we now have the ability to collaborate and ensure that Ruby is getting access to the services that she needs, and we're informing the case manager, but we're supporting the case manager. And so we're driving value throughout Ruby's continuum, but also just driving a real difference in Ruby's quality of life. And by the way, the quality of life for her daughter, who's at home freaking out because she doesn't have access to food and the daughter lives 5 states away. So let's talk about personal care, which is what I've been doing for 14 years, a challenging business, but what a rewarding one. And I think we saw that with Cheryl and her video. People who do this, they do it because they care. Personal Care, the customers who receive these services are nursing facility eligible. What that means is that they would be in a nursing facility if they weren't receiving these home care services. And so when we talk about why is -- why do we see reimbursement rate increases of $6.5 million this year, but we're hearing about home health cuts? It's because our services ensure that, that person stays in the more cost-effective setting. If they weren't staying home, they would be in that nursing facility. And so we want to continue to support these services, and we see Robert with Robert's help, our state legislators, our state programs, our MCOs supporting us to meet that goal. So nonmedical services, what are they personal care services. These are those fundamental activities of daily living that are not medical. So this does not require a clinician, but are nonmedical that allow us to function and be independent in our homes. And it's bathing and grooming and meal prep. It's helping somebody move from this place to that place. It's ensuring that we're preventing wounds from occurring because they're not sitting too long. It's also companionship and addressing that key factor that has been top of mind because of this pandemic, which is loneliness. And it's making sure that they hear somebody's voice every day, but that they also feel somebody's touch every day. And what an important thing for somebody who's maybe lost their spouse and is now living alone. These are super meaningful services, everyone. This is what it's all about. And we are really privileged to be able to be a part of these people's care continuum. We are often, and we hear this time and time again, the only voice that, that customer hears sometimes on a weekly basis. And I know this from experience, you can have loved ones who care about you to the Nth degree. But if they are 7 states away, a phone is the best they're going to be able to do. And so this caregiver provides a bridge. So how do we differentiate ourselves across our competitors? We do that in a lot of different ways, but in 3 critical ways. We differentiate ourselves to the plan, we differentiate ourselves with our members, and we differentiate ourselves with our employees. And what I would say is that this comes down to relationships. We are in the relationship business, and it's what makes us stand apart. So when we talk about scale and density, of course, a plan is going to want to have 1 provider that is a preferred provider or 1 or a few providers, I should say, but that is a preferred provider that they could go to every time that gives consistently good quality services. Yes, of course, they're going to want that. But scale and density is just as important to that customer or that member and their employee. And that's because when a customer comes to us, we are a more reliable provider because we have access to a bigger pool of candidates to pull from to provide services to them. It also makes us a better employer because now that caregiver has a more dependable paycheck, right? If your customer goes into the hospital tomorrow, where are you going to get your next paycheck from? Well, you're in a large organization. You could get that next paycheck from us because we have a lot of other members that we can match you with. And let's talk about that match because we're in the relationship business. Finding the right match is so critical. We did a recent study with our caregivers. And time and time again, they came back and said that, that right match is critical to their job happiness, their job retention, but also to that member satisfaction. And so when we talk about the right match, I like to joke that this is a lot like a dating app. Sometimes you have to go in a few dates before you find the one. Well, it's harder to go on a few dates when you're in a small organization that doesn't have that large pool to pull from. But when you're in a larger organization that has the scale and density that we do, we could find that right match, and we can make it something that is truly meaningful because that peer support that person who's relatable because they grew up in the same community and they know about that football field down the street or they know about the little kid who runs around in the playground next door and make so much noise, that is meaningful to how that member experiences the care that they receive from that caregiver. And so we are a community-based organization and our community experiences are truly what makes us successful. And we've got caregivers in every community, and we have relationships with case managers in every community. And this is a zip code by zip code business. And let me tell you 2 zip codes right next to each other are very different spaces. And so we've learned to scale this business in a locally fragmented world. And that's what makes us unique and that's what makes us win every time. On everybody's minds, recruitment and retention, it's the key to success and it is a very challenging world out there right now. We are evolving how we recruit and retain caregivers because everybody has to do right now. and we are very fortunate that we have scale because we're able to do it better than the majority of our competitors who are local mom-and-pop competitors. We are able to bring valuable benefits to our staff. On July 1, we are rolling out health care benefits that are better benefits, cheaper benefits, and we're making them available to caregivers on day 1. So this is really critical. They don't have access to that today. Our competitors are not doing that. And so these are the types of benefits that allow us to differentiate ourselves. We've implemented daily pay, which not only gives them transparency of pay, so they could see how much money they're going to get today that's supposed to hit their bank account on Friday, but also gives them the ability to click a button on their phone and have that pay go right into their account today instead of having to wait for payday. That's empowering in a world where you potentially live paycheck to paycheck. It's also empowering when you have a flat tire, and the only move to get your next paycheck is to get to your next appointment, but you have no funds in your account to get there. We are empowering these folks because they could do so much more than just provide a bath. They could give us actionable data that is truly meaningful to our customers. And we're doing so much more when it comes to recruitment and retention, we're talking sign-on bonuses, employee referral bonuses. We are doing a cell phone benefit program. We are thinking outside of the box and we're bringing those benefits live to our caregivers because we know that to succeed in this environment, we have to be thinking about them and building a really robust toolkit our toolkit, there's no 1 tool for success here. Our toolkit varies zip code by zip code, right? This is a zip code business. So there is not one size fits all. We need to be diverse, and we need to be constantly thinking about what else we can be doing to create a community for these caregivers so that they feel like they belong with us. And how do we do that? We continually invest in them and bring value to them in their day-to-day lives. And that's how we win. So we're doing some really unique and interesting things in impacting patient outcomes that we wanted to make sure you knew we were doing today. We have data on change in condition monitoring that our caregivers are capturing and they don't have to be clinicians to do it. So electronic visit verification is a means for those caregivers to tell us where they are, when they're there, and they could do it using a customer's telephone or using a GPS phone, a smartphone. And we're capturing data from that process where they're telling us where they're at on change in condition monitoring using Nonclinical questions. So stop and watch is the tool that they use and stop and watch as an acronym for all of those nonclinical assessments they're making. Is the customer eating less today? Is the customer sleeping less than normal? Have they lost weight? These are things that a caregiver can answer easily that are potential escalations. And what we're seeing is that 55% of our customers that are in this program have some type of an alert in a 3-month period. And 15% of those alerts, meaning it's a potentially actionable item are actionable and they are escalations. And our clinicians that are involved in overseeing the care of all of these cases, have the ability to then escalate those directly to the PCP to the family member to the plan. And we're being impactful and we're giving them data and insight that they don't have today. The other thing that we're doing is we're engaging in pilots regarding closing care gaps. Those care gaps are going to a PCP visit, your annual visits, any preventative care visit is a gap if it's not completed that year. And we're engaging in that because we have the relationship with the member. We have a relationship that trumps the relationship that the plans have -- and sometimes that the family members have because we're there every single day. It is not uncommon for a family member to call Ruby's aids to say how is Ruby doing today? Because that aid has more knowledge than they do because we are the eyes and ears in the home. And so we are making impacts when it comes to closing care gaps because we are able to then better voice hey, she can't get there because she doesn't have access to transportation or her PCP retired and she needs a new one or there's not a great network here, how do we get her access to the right PCP so that she could get this care gap closed. So we're using nonclinicians to make a big change for these customers. So obviously, this is a compelling story. I hope you're all here because you know it's compelling. We are one of the largest providers of personal care in the United States. We have $637 million of revenue. We're servicing 28 million hours per year of services, and we're good at what we do. We have a ton of white space, as Dan mentioned, we've got white space in new markets, but we also have white space in the existing states that we're in today. If you look at Pennsylvania alone, we're an eastern provider. The whole western side of the state is white space for us. Pittsburgh is in the Western side of the state, second largest populated city in Pennsylvania and it's sitting in a part of the state that we don't touch. So we've got opportunity that is just so exciting and compelling. We also spend a lot of time getting to know our customers because we are with them for 4 years on average, which is completely different than a home health model, where you're with that person for 30 to 90 days in an episode. We create a relationship that lasts. We know so much about that client and we're gathering that information and providing that data back to our plans. And team member retention, we excel here. Our attrition rates are 50% of our competitors. That is something to be proud of, and that means that we are doing something right. We found a way to take a localized business and scale it. And we're going to continue to do that. We're going to continue to execute and we're really excited about what that means for our future. That being said, when we leave that customer at the end of our shift, whether it be at 12:00 in the afternoon or 5:00 at night, often, our customers are alone. And so I would love to introduce you to Jessica Hylander, who could talk to you about our RPM business, our remote patient monitoring business, who can be there when our personal care aids can't.

Thank you. Hi, everybody. All right. So Mia is right. We're a partner in care when it comes to providing care in the home. So personal care and remote patient monitoring, it's such a great marriage and so great to go together. So let's go back to Ruby. Thank you. So how could we support Ruby? So we have a number of services. First and foremost would be our personal emergency response, PERS. I'm actually wearing 2 of those devices today, 1 here on my wrist, push the button, we connect to the call center. And here's our mobile device, very easy. We can put that -- Cheryl, you saw in the video, she was worried when she went home. She's actually calling her client to make sure she's okay. This is where we can partner together. We can put a monitoring device with Cheryl -- patient at the home and just have a continuity of care. The great thing about PERS, it is not that I've fallen and I can't get up button, it's a live voice on the other end of the device in a matter of seconds. There's no phone call to a member, no phone number to look up, no tree to navigate through. It's pushed the button and a live person is on the other end. And we develop these relationships and this cadence of care. Again, Mia's business and my business, very, very similar. It's not home health. We're not talking about an episode of care of 30 to 90 days. We're talking about years on service. For PERS, about 3.5 to 4 years is the average length of service. So we're with these patients and develop relationships and have this cadence of care throughout this lifetime. Another thing that we could do for Ruby would be vitals monitoring. For Ruby, who's a diabetic, we would do a glucometer, it's Bluetooth enabled. We would make sure that she's testing her levels every single day. If she doesn't, we step in and find out why, identifying barriers to care and helping her move through that. Another way we use vitals, there's a scale right here. I am not going to step on it in this room. But how it works, for example, for CHS, you're looking to see those small daily changes in weight because that signals something is really, really wrong. A vitals monitoring program like ours is a daily check-in. So If they don't get on the scale by 10:00 in the morning or whatever we've agreed on, we're going to again call, remind them to do it, get that reading, it's consistent. And what we really do right now is we eliminate the noise for clinicians. So great story. We had a scale at a member's home and we started getting these devices signals. We've got about 15 right in a row, 4 pounds, 5 pounds, 2 pounds, 3 pounds. All of those would have gone to a clinician, but instead, we sit in the middle, and so we call. If you're out of bounds, we call within 15 minutes and find out what's happening. In this case, their grandchildren were weighing the new puppies and that was all they have puppies and weighing them. And so we were able to take that noise out of the clinicians so they can spend their time on actionable data. And that's really what our vitals program is about today. Then we have medication management. Again, this brings order to chaos. A lot of our members are living in really rough situations and they don't necessarily have this peace of mind for example, those who have dementia to remember their medications every single day. So this is a way we couple device with individuals. So we've got a device. It has between 30 and 60, 90 days of medication, it opens up every day at a certain time and they need to take their medication. If they don't, it signals into us. It also won't let them overmedicate. In case they've forgotten that they took it earlier, they have to wait 24 hours for that next slot to open. So this is another way that we can come and from a distance support. And in the future, we can support with personal care and have their clinicians come in. When they do the initial evaluation, bring a device that's appropriate with them, couple that with vitals monitoring come and change that medication. And then we have E3, which we're going to talk about later, which I'm super excited about, which is this completely unique member engagement platform, and it's built on kind of the core of our business, some really long-term thinking of how we set up and our dedication being kids and grandkids serving parents and grandparents, that really set up E3, which you'll hear about in a minute. But E3 is not our only differentiator, what makes us different from our competitors, number one, really important, we are device agnostic. So we may have the competitors that rely on manufacturing their own devices, and they're locked in. We are not locked in. We monitor over 260 devices today. We also have an app to connect to 2,000 other systems and we can meet a member wherever they are. How many people have Apple watches or have an enabled Apple Health? Perfect. So I can get all of your information. We built a really diverse platform, not about PERS, but instead, we are just poised to take in all that information and we're ready to meet the plan and the member where they are. The second thing that really differentiates us would be operational excellence. You heard me say the same thing. This is a referral-based business, I don't advertise to get new patients instead they refer each other. Somebody in their line of care says, you need the service and then again, it is client choice. However, I'd equate to kind of how I ask my husband, which dress I should wear. One comes in front of the other, right? So you've got that case manager, and they like, which provider would you like to use? The provider that made their life easier that gave them excellent service, that's who's in front, and that's what we do really, really well. And the proof is in the pudding, right? So the market has responded when it comes to monitoring. We have a very diverse client base. We're in that MA space, managed Medicaid, state Medicaid, PACE programs, over 125 health systems and distributors. All of those are saying, "We love your service, and we keep coming back." We also have a national scale. We're going to talk about this in a minute. This distinguishes us in lots of different ways and gives us levers to grow in the future. And then E3, again, I can't say enough about this. We're going to dive into it in just a minute. But this is taking advantage of those 2.5 million calls every year and pushing forward value and outcomes. So let's get into some more numbers when it comes to remote patient monitoring. Number one, 230,000. That's how many members we actively monitor today, 5 9s, that's my uptime, 99.999, did I say it right, Walt? All right, and what that means and enables us to do is to have an industry-leading response time. So within seconds, and our ASA is 10 seconds, someone is live and on the other side of the device. People love this and respond to it. Next number, I'm going to tell you, 86, which is our NPS score this year. So for those of you who don't know about Net Promoter Score. I have 2 boys, if they came home with an 86 on the test, I maybe wouldn't be thrilled. But that's out of 0 to 100. NPSs have negative 100 to 100. If you have a 1, that's considered a good score, a 40 is considered an excellent score and a 70 is considered world-class. We have consistently been in the 80s year in and year out. And this is our users rating our service saying, we believe in you, we trust you, we like this relationship, and we want to come back for more. And that's where we've seen the growth. Here's another number, 40. That's the number of states where we're authorized or enrolled to provide remote patient monitoring services on behalf of Medicaid and Medicare. And why is that important? It's really hard to credential and enroll across multiple states. We have a phenomenal staff. The monitoring team, I'd say it's kind of like a Rubik's cube. Not everybody can do it. But if you can find somebody who can solve that puzzle, you want them on your team, and we have a phenomenal team. And this gives us tremendous advantages when it comes to expanding meals to get credentialed in different states and be able to keep that moving forward. The most important number is not actually up here, it's 100%. The most important differentiator for monitoring and Modivcare as a whole is that we're 100% health care-focused. Our priorities are aligned with our members' priorities and our plans priorities and our payers' priorities. How this kind of took place when it comes to monitoring. Our competitors do not want their members to push their button, it takes up talk time. We have always had a different philosophy. I want you to push that button every month. I want to push that button when you're lonely or you're scared or we've had clients call during Christmas and they want us to sing Christmas carols over the phone. We do it. Why? Because it develops a relationship of trust. So when there is a time and need, they push that button, and we can be there. So again, our competitors, 90% of those calls, they've been trying to reduce it. That's time, how could we stick in AI, how can we test without a person talking. We have not had that philosophy. They saw that 90% as waste. We saw that 90% as opportunity. How do we leverage that time for more value? And that's what birthed E3. So E3 is completely unique in the space and would be very difficult to enter at this point, especially for our competitors. We have a proprietary platform and it enables us to do this, education, engage and empowerment. The plans are in the driver seat. They tell us what they want to prioritize for their membership as a whole and individuals. And I can queue up an individual platform for the Ruby as soon as she dials in and talk to her about what her plan things most important and it's dynamic, it can change every month. So that we can talk to her, if she had an A1c test that she didn't do, but she did the next month, that comes off of our platform and a new message comes on. So it enables us, again, at the beginning of an E3 program, perhaps we're talking about them, do they understand their condition, Ruby's a diabetic. Does she understand how important her meals and her diet are to controlling her disease does she understand how critical it is to have our A1c test on a regular basis or using her glucometer. And then it can also evolve into making sure she has a primary care physician or what are her barriers and care. Super, super impressive. And why don't we try it out? What do you think? We can take this off.

This is Carrie in the care center. Are you needing help today?

No Carrie, I'm just testing.

All right. Jessica, thank you so much for taking the time to a test with us today. And as part of that test, we do like to just verify we have your address and phone number on file correct? Is it safe for me to go over that?

Yes. Go ahead, Carrie.

Wonderful. We have the address of 6900, Latin Avenue, Suite 1200 in Denver. Does that sound correct?

Yes, ma'am.

Wonderful. And then a phone number of (800) 860-4230.

Yes, that's right.

Wonderful. And then part of your benefit is to provide you with helpful tips and reminders. This month we're going over the A1C test. That is a simple blood test that measures your average blood sugar level over the last 3 months. This test is important as it helps you and your health care team manager your well-being, you can complete this test with your doctor during a check-up. Do you need help scheduling an appointment today?

No, Carrie. I'll schedule it on my own. Thank you.

All right. Wonderful. Do you have any additional questions I can assist you with today?

No, I think I'm good.

All right. Well, you have a great rest of your week and you just press that button any time you need us.

Thanks so much, Carrie.

Thank you. Bye bye.

So that's our care center, and that's a real rep. I do have a fake account because clearly, I don't have maybe A1c issues quite yet. But E3 and Ruby, that's -- Ruby is fictional. E3 is not fictional. It's not even a theory. We are doing it now and we already have results. Take a look. So what you see here is a 5-month program with a major MA player. Their main goal was to reduce and close gaps in care. For those who don't know, plans, MA plans and others are scored their star ratings and other quality incentive programs has to do with how many gaps in care they can close. And as Mia mentioned, a gap in care, a lot of it is preventative and may look different for each one of us, but they're loaded up and they need to be closed by the end of the year. So 2 things to take out of this program in our E3 pilot. One, we've proven that we can engage at a ridiculously high level and deliver quality content doesn't have to be complicated content. It needs to meet the member where they are. Number two, not only can we deliver content, but what's more important is that we can drive meaningful outcomes. We are changing behavior. So engagement first. During 5 months, 87% of the population connected with us. They wanted to talk to us. We did not outbound, chase these people at all. This was all inbound desire to talk to us and be part of that relationship. But it wasn't just a onetime deal. You'll see 60% of the members every month were engaging in the program. That's huge for plans. If I'm making an outbound call engagement, maybe I'm connecting to about 40%, 45% of members. We're connecting to 87%. And I'm not connecting once, I'm connecting multiple times, which means I have multiple opportunities to collect data and give a plan a much more holistic dynamic and real-time insight into their members. Again, what was really important, yes, we can enact to them. They want to talk to us, but they're doing something with the messages that we give them. So the meaningful outcomes. Compared to the control group, we were able to close 40% more gaps in just 5 months. That could be, for example, closing more 80% more colorectal exams. Those were closed. We also had the opportunity to connect members with planned support, and that's definitely an issue for plans. They have programs. They have support. They have resources, but they're having trouble getting them connected. So 34% more of our group connected with planned resources during those 5 months. And of course plans love this, we were able to reduce churn. So compared to the control group, we had a reduction of 20% in member churn. So this is E3, again, super exciting. It is real. It is live. We continue with these programs, but it's not just limited to monitoring. E3 is really the proof of concept as we grow this across the business. All right. So now we're talking about the evolution of home services and which we talked a lot about this together, bundled service, coordinate care, pulling more data. Let's start with what happened before we were part of the Modivcare family. One, when it came to providers. We had 2 providers, both the personal care and the remote monitoring. We were industry-leading in our services, but we were siloed. When it comes to plans data, so a plan wants to know and are making all these decisions based on algorithm. And you all know your algorithms, your analysis only as good as the input that they get. What they're used to is lagging claim data. So it could be 60, 90 days old or assessments. Assessments happen once a year and only 40% of members even complete them. The difference now that we're part of the Modivcare family is to completely reshape the information that the plans have and the services that we can provide. So obviously, we both support in the home, and we can support each other. Again, that clinician that goes out for the first time can bring a remote monitoring device with them. And that can do a whole 24 hours of care. So when Cheryl leaves, she doesn't have to worry about our patient and we have another network of support. It also gives us broader and deeper and richer information and a cadence of care and relationship, we're there to support them in so many different ways. And you guys all know if you have a flyer where you have to fill out your assessment, and it's just in your doctor's office, may I ask you basic questions you may not answer them. But if you're talking to a really trusted friend and you believe in them, and they've been there in moments of need, you're much more likely to be truthful and complete in the information. Obviously, E3. E3 does not stop with monitoring. It's going to expand because we have all of these touch points. I have 2.5 million calls. Mia has got 28 million hours. Ilias has 27 million paid [ trips ]. These are all opportunities these cadence of care that we can take to collect data and put it all together. And that's really what the future is about. It's harnessing the power of all of these services because there's no one else in the industry that has this many touch points on to members' lives. And this is what's going to fuel the growth. So why we win? We keep talking about this one-stop shop. There is no one else in the industry that has these kind of diverse and critical high-touch moments that have brought it all together. Payers want a scaled provider that's single throat to choke and somebody who can do it across the board, and that's what we can do. It's more about being big, though, it's off of that depth of service, which you just talked about. E3's so many data points and rich data points that we can pull together, which puts us perfectly positioned for value-based care and value-based contracts. And then we have the tailwinds of in-home care. We have an aging population, and they want to age at home. The payers also would like them to age at home and avoid really expensive long-term care or facility-based. So we've got great directions going into growth. Personal care, 7% to 9%, remote patient monitoring, mid-teens. And in addition, we have additional growth, de novo and acquisitions. For example, we just picked up Guardian medical monitoring, really excited to get that in-house. None of these things, however, are possible. So bundling service, E3 operational excellence, these are all built on a foundation of a best-in-class tech platform. So I'm going to bring Walt up next to talk about our tech.

Thank you. Hey, guys. I want to let everybody know first, we're going to do a break right after I get done. Unfortunately, for you, I never hit the stage, so I have 100 slides to go through, no problem. I'm only kidding. So first, my name is Walt Meffert, I'm the CIO at Modivcare. I've been here approximately -- or pardon me, just over 2 years now. I'm going to walk you through what we're doing to build a best-in-class tech-enabled -- enabled platform. But I'm going to take you on a little bit of a digital transformation journey. First, Modivcare technology strategy is focused on 3 things: one, consistently improve the member experience through our technology product and services, including the automation of our back-office functionality; two, drive better outcomes through our vast amount of data to support value-based care; and three, drive cost efficiencies through size, scale and automation. So we've made tremendous progress in reducing our technical debt. And what do I mean by that? And I can start with the bare basics, which is even our call center reps, the people that operate this business had 10- to 15-year old computers. We had to completely reprice those in a matter of months because they couldn't do their jobs. We didn't have the core infrastructure such as the redundancy in our networks. We didn't have the redundancy for our data centers. So some very fundamental things. But on top of that, the business -- the core business, the NEMT space, we really were a manual-based business. And what does that mean? We were very paper-based. So very little -- we had very little systems automation. So things like trip logs, transportation provider billing, even our call center interactions were very manually done. They actually literally had a binder, and they would go through the call sheet, oh, this is Humana or another customer and here's the script. They didn't have an automated system. The back office also had very little automation, which caused accuracy and efficiency and scale was obviously hard to achieve that way. Then on top of that, when they did start putting in systems, they really didn't solve the business need. So what did they do? They threw more systems at it. And then they said, oh, well, integrate those. So we ended up with a hodgepodge of sometimes 3 or 4 different systems that did the exact same things that really weren't integrated. So we were getting all kinds of different outcomes and reporting. All this makes up a tremendous amount of technical debt. I'm happy to report that we are more than halfway through replacing and retiring that technical debt. And we continue to drive system improvements. We also adopted a cloud-first transformation strategy. And today, we're 75% in the cloud. And soon to be within the next 18 months, we'll probably be 90% to 100%. We continue to do business unit integrations. And this is all to drive speed, innovation, flexibility and more importantly, scale. One of the things that I would say to take away from this slide, if I were presenting it 18 months ago, it would be almost blank. So we have -- in the last year, we have drastically improved our technical product capabilities and offerings. And I'm just going to kind of walk through some of this. But basically, what we've done is we have built and put technology in place to support the business models that Ilias, Mia and Jessica just walk through. Home, we had a vitals program that you heard about through Jessica. But this program allows us to integrate it. It acts as a hub to integrate over 2,000 different medical monitoring devices. In the personal care space, we have an app that allows the caregivers that is fully integrated to our back office or pardon me, our cloud-based back office an EHR system. One of the things I'm most proud of is we launched midyear is a new member app that is fully integrated. And what that has is it has the ability for a member to order meals, it can schedule a ride, see where your driver is and a host of other functions. And later this year, we will introduce mileage reimbursement, which we also have a separate at, but that will be completely integrated into our member app. In April of last year. We also, as Dan mentioned, we acquired a company, and we've now rolled out a transportation management system called WellRyde that is fully integrated. That's helped us achieve the 75% digitization this year. And what that amounts to is 2.2 million rides a month. Think about that. Last -- or not lastly, but one of the other core technologies we put in place was an IVR IVA. Again, Ilias spoke to this. Today, 15% of our calls that come in are handled without any human interaction. 60% of our HIPAA validation is handled also automatically. And lastly, which I didn't put on the slide, but it was a tremendous amount of work by the team was the back office functionality, claims improving and automating that, claims processing, encounters and reporting. Now obviously, I've talked about we have all these different applications for all the various different business units. But starting -- we recently started integrating all that. And that's what the future looks like, a completely integrated system with a member experience that brings it all together to be able to handle every one of our areas of service and products. The one thing I also haven't talked about is our data, right? We collect vast amounts of data. What we need to do is pull that together in a common repository, a data lake so we can have better analytics. We are unique -- so we are uniquely positioned to utilize this untapped data analytics area. We collect a tremendous amount of data. We are truly one of a kind with our vast collection points, including collecting data from members in their home. We have a great opportunity to consolidate this data, to use it to drive better outcomes to deliver better predictive analytic models using artificial intelligence to really make real-time data decisions to care. I'm going to talk a little bit about scale. I would say no one can compete with us when it comes to speed, cost and scale. We leverage a global technology infrastructure. Last year, we opened an office in Bangalore, India, mostly to help drive speed, innovation, flexibility. Today, we have [ 72 ] employees on board in seats. We plan to have 120 by the end of the year with potential to grow much larger, but also with less than 5% attrition. On top of that, we have developed a unique platform that allows us to scale. For example, reporting. We've completely automated our client reporting mechanisms. Today, we handle over 1,600 automated reports per month. We have delivered on a self-service reporting system to our key customers. We've automated encounters processing, which was a huge deal anybody who knows anything about encounters. Today, we have implemented over 200 customers in 46 states. We process over 7,000 monthly eligibility files a month. Think about that. There is nobody in any health care company. I can't even name a health care company that has to handle 46 states and is already implemented and automated. Digitization. Scale. I talked about the transportation management system that we introduced. We handle 2.2 million rides a month. Again, nobody handles that much. Nobody can come close. And lastly, something I'm very proud of that our team achieved and we don't talk a lot about it, but it's very important to health care and to many industries and that is security. I'm proud to say we achieved our ISO 27001 certification, which is the gold standard across all industries. And again, I don't believe there's another broker out there that has achieved that. This is how Modivcare technology leverages the scale to reduce costs and elevate the customer experience. In closing, the 3 driving strategies for Modivcare technologies are enhance the member experience, leverage our data and leverage our scale. And I would say, I, for one, am really excited about the future as one of my first graph showed the more we retire our technical debt, the more we can lead this industry in new technologies. So with that, I thank you, and we will take a 10-minute break. So thank you. [Break]

Okay. Yes, we need Dan and Mia, and then we'll start with the Q&A session. Again, we've got another Q&A session after the second group of presenters present today, but I'll moderate Q&A. We can start off and see if there's any questions. How about Jack in the back? If you could give your name and firm, and then we'll keep it moving. So go ahead, Jack.

This is Jack Slevin with Jefferies. I appreciate you all doing this. A lot of really great content there and lots to work with. I guess to kick off, Dan, I think there was a couple of allusions to it in the presentation, but maybe to give you an opportunity just to set the record straight on this, there's a lot of confusion in the markets pretty clearly reflected in the share price over the last couple of days. As it relates to the Medicare home health rule, is there any direct impact in your business? And furthermore, is there any read-through we can make to the personal care side of the business? Or is it purely noise?

Yes, there's no correlation. I mean that's the issue with home health companies, is they have pen-stroke risk, right? And it cuts both ways. They thought they were going to get an increase, and they got a decrease. But the states -- the decision on personal care is made by the states, what they decide to do in terms of reimbursement. In fact, it's -- even places like New York, it could be -- what they set for reimbursement could be county by county. And so -- and like I said, we've seen of the 7 states, 5 have afforded us reimbursement increases. And in many of those instances, we didn't expect them. And Mia talked about like why these states are so behind personal care. Because it keeps people out of institutional care. And we're -- the wages are very different than what you're seeing. And again, I think some of the issues on the home care side is their EBITDA was in the 20-some percent range. And I think people see that. And they're like, "Holy mackerel, there's -- we're not that company either." So I just wanted to get 100% clear, we're not home care. There was a reason for that. I didn't want to get into nurse shortages, right? I didn't want to get into excessive labor pressures, right? I didn't want to have pen-stroke risk, right? I didn't want to get into episodic care. I wanted to get in the business of stable chronic care, chronic care monitoring. And that's why, again, when you think about the supportive care business, that's it. It's worth 4 average -- our average length of service is 4 years. And we're -- and again, I don't think the reimbursement environment is going to get less favorable for us. I think it's going to get more favorable.

If I can squeeze in one follow-up, and I think you're right on the line.

Please.

A lot of really great information. We've been very excited about the assets you pieced together and the implicit value there. As you think about moving forward, $300 million EBITDA target out there for 2025 now. By the time we get to '25, do you think you'll have moved the business forward and integrated everything on the capabilities front to be able to take risk and go into conversations with payers where they're going to be willing to pass risk on to you? Or are there other capabilities or assets you think you need to bolt on to get there?

Yes. I mean there are other assets that we might be able to bolt on, but what we have right now, we can do it. And in fact, we are doing it. We've got a couple of pilots happening right now that I think within -- what would you say, Brett, 12 months? 12 to 18 months, we're going to make it happen. And so -- and I think we'll have enough data at that point in time. I think we'll have our systems and companies integrated from an enterprise data platform at that point in time, and we're going to be in a really good position to do that. So that's well before '25. Let me say one other thing. Thank you. Ilias talked about this, but we've been doing risk-based contracting for 2 decades. And in some instances, we are -- in 44% of the instances, we're taking full risk. We've done this. This isn't like -- you go out and talk to the companies that say they're taking full risk and how many have 44% of their business is full risk. It's few and far between, as you know, Jack. And so we're in a really unique position just based on our actuarial experience that I think also separates us from other companies who might consider that. And we're not afraid of it as a result, either.

Let's go to Brooks upfront.

Brooks O'Neil from Lake Street. You talked a lot about a national platform, and I saw a lot of white space in Minnesota. So I'm kind of curious about that. But...

2 months of the year, we'll be up there.

The national platform, in my opinion, is really, really exciting. And the personal care business is very complementary to everything you're doing, but you're in 8 states. Talk just a little bit about how we get to 50 states, how much time that's going to take and how big it's going to be when you get there.

Yes. I don't know if we need to get to 50 states because, again, you look at the patient populations that we serve, we're going to follow kind of duals and Medicaid. And that's not 50 states. So I'll just put it to you that way. I think Mia talked about it, and I know what you're referencing about. It's going to be helpful to have more dots on the map, there's no question. But there's a lot of opportunity even in the states we're in. This could be a several billion-dollar business just in the states we're in right now. And I don't want to lose sight of that from a revenue growth standpoint. But Brooks, if you look at our model, we absolutely unequivocally believe that we need to be in other places. And what -- we were so aggressive on our, I would say, acquiring these assets. It was because there weren't a lot of them. And in fact, there are very few that have the scale of either Simplura or CareFinders. Thank you. I'm getting all these names mixed up right now. But -- so we had to move quickly on that. There aren't a lot of those other ones. That being said, I think we'd have a plan to be able to secure states in, I think, a very efficient manner and then build out around that. And so I think that's kind of how we're thinking about it right now. I don't know, Heath, what else would you say?

Well, your one question was around size, right, the $650 million of revenue. In our large states, we're still less than 10% of market share. We can kind of do the math there, just in those states, and then, of course, [ we go to other new ] states. So the size is very large.

Yes. Great. Manifest destiny, go west, yes.

How about...

2 months promise.

I think he had an issue with the mic.

Bob Labick with CJS Securities. We've had a great day so far. Fantastic presentations, and great to see the -- meet the whole team and everything. So really, great job so far. I just wanted to stick with kind of the big picture and the bundled care and the opportunity that you're presenting. And maybe give us a sense of kind of where the industry is right now. How many -- we're aware of, I guess, [ United Healthy at Homes ], kind of Medicare Advantage opportunity that offers multiple of these offerings that you guys have. But where is the industry in general in terms of bundled care and providers of bundled care now? And where is it kind of going in 2025 and beyond? Just give us a sense of where the industry is in this path.

Brett, why don't you answer that one? So for the record, people who don't know Brett, Brett was at Optum. Brett was at Aetna. Brett was recently at Cityblock. So he has a lot of, I think, insights in this area. And one of the reasons he came here was for this reason.

Yes, exactly. You're stealing my thunder, my intro. So all the payers -- it's not an issue right now of are they going to get into SDoH or do they believe SDoH investments and bundling SDoH is going to be impacted with their business. It's how are they going to do it and who they're going to partner with, right? And all are making different investments, and most of them are partnering. Now many of them have made individual investments like point solutions. Like United went out and they bought some housing. They bought some apartments. And the reason we did that back then was we wanted to learn from it, so we knew how to partner better. So we knew what the real implications were. So we knew how to contract. Because that's what we're really good at, is contracting for networks, right? And think of SDoH as a network of bundled benefit that we can go and take a risk on in the future. And as we move into this, it's going to be imperative that we have the data and the analytics. But if you think about their blind spot, there's no CPT codes. There's some Z codes once in a while, right? But there's no UB-92 or HCFA-1500 being filed. There's no claims data. We own all of that data, and we can actually enhance that data based on their needs that we talked about with E3 and start producing real actionable data that they want for their plans to be more impactful. Hopefully, that answered your question.

Yes. But what -- when you think about the percent of payers that are -- personally, I think it's build it and they will come in some respects, and -- but go ahead.

I mean the recent study just from this year from the health plans is that 80% of them are moving in this direction with SDoH investments. And you look on the state side, the waiver programs and the CHS pilot got held up with the work requirements and with the pandemic. But moving into these SDoH investments, even at the Medicaid, the regulations already exist through the ACA, right? They already exist through the waiver programs. They are making these investments. And when you ask the question, I say it's 100%. I say they have to do it, table stakes. I mean 89% of the -- 30% of the excess deaths are due to SDoH. This is something that we have to do as a society. It's the last fashion of being able to really control total cost of care.

And so how many of your contracts are -- or payers have multiple of your services now?

Yes. Great question. I'm going to show you an example. When we go -- we have 1 of our big 6 examples. And they have at least one of -- every one of our 6 solutions, they're not tied together from an accountability perspective. But you'll see, even with that one payer, we still have an $800 million opportunity for growth with that one big 6 payer even though we have significant presence in 2 or 3 of our major solutions.

Got it. And my last one, I promise.

No, that was great.

How do you enable that cross-selling to combine all of your offerings with that payer?

Yes. Number one is you got to deliver. And as you can see, we're delivering. I mean on our home side, we're producing amazing results. We're continuing to invest in the NEMT side, in the technology, and we're performing better and better every day and tying those together now and showing. So we have to go into pilots, and we've got a couple of pilots already. I think Mia and Jessica shared one of those with you on E3. And to get to this journey, we need to invest in pilots with these big payers and go where they have need and just custom design these solutions with them and prove that we can drive total cost of care and quality outcomes.

Yes. One other thing I want to point out, too, if you've looked at Anthem and UnitedHealthcare when it relates to their MA product, stated that -- both of them stated in press releases, there's 3 things they're focused on: transportation, meals and personal care. They're going on record saying this. So -- and we built -- we put these assets together before they went on record for the record. But obviously, I think we're -- again, I think we're in a really, really extraordinary position.

Next question. How about -- let's go to Scott, and then Jess is going to be next.

He asks tough questions. Get somebody else.

Scott Fidel with Stephens. I wanted to ask a question on personal care and maybe just to contrast with, obviously, there's a lot of focus on the Medicare proposed cuts, and the funding environment on the Medicaid side has been particularly strong. And then we've had the enhanced FMAP funding that's come through. And we're seeing a lot of that now get operationalized with the enhanced funding for home and community-based services. And so just interested. You guys already gave us the stat around $6.5 million of reimbursement increases for personal care this year. And I'm just interested how -- if you could give us some color on how your rate increases have just been breaking up between -- there's been some permanent rate increases we've been seeing, and then there's been some of these temporary rate updates that are flowing through the enhanced FMAP. So just can you give us some flavor for sort of how that breaks down, whether it's around the $6.5 million or just any way that you want to sort of talk to that?

Heath, do you want to cover that one?

Yes. Well, so from a math perspective, Q1-on-Q1, our reimbursement rate went up 7% and our costs went up 4%. So that's kind of a good proxy for where we're going to be, if that was your question around rate versus cost. So some of that gets passed through, some of it doesn't. And some of it is required, some of it's by choice. So the states that we're in, as you know, are very favorable to rates. But yes, that's kind of the delta that we had in Q1.

And I guess -- Heath, that's helpful, but also those would be all sort of the baseline sort of permanent rate increases that you're talking to and comparing to.

Yes, absolutely.

Because there's also been these additional sort of funding coming through on the HCBS from [ Provado ] as well. So that's separate.

That's correct. Yes, that's all permanent side. That's correct.

Let's go to Jess.

Jess Tassan from Piper Sandler. Thanks for having us out here in Denver. So my question is just with respect to the NEMT business. What kind of oversight or performance and -- performance measurement exists there? So once you get assigned a transportation contract, who is the body responsible for oversight? And what metrics are you being held to?

Yes. So that's a great question. So I talked a little bit about being obsessed with on-time performance. I would say that that's the key metric that we're being held to. So again, if we're contracting with the state or if we're contracting with an MCO within that state, what they're mostly holding us accountable to is on-time performance. So what that means is getting the member picked up from their home, getting the member delivered to their appointment on time and then picking them up from their appointment on time. They also look at other metrics such as missed trips, no vehicle available, complaint metrics, obviously, safety metrics. But I'd say the kind of core metric around NEMT specifically would be on-time performance.

And I would say the -- what's happened in the contact centers, too, because...

Yes. And the car trips, absolutely.

Those are typically set at about 80%, and we're achieving 97% right now. So we're kind of blowing the doors off of the service levels at the contact centers.

Yes, absolutely.

And then just a quick follow-up. So on the reliability improvements, I think you guys cited 20% or 25% in terms of on-time rides or an improvement of 20% to 25%. What's kind of driving those reliability improvements? Is it how you're vetting the drivers, compensating the drivers, incentivizing them?

Yes. It's a combination of all those things. So again, if you think about the efforts that we have around digitization, being able to more accurately track the rides, being able to get in touch with providers proactively versus having to wait until the member is calling us to say, "Where is my vehicle?" We can see that maybe a ride's going to be delayed, and we can interact before we have a hit to our performance or before that member has a complaint and get out in front of that. So I think digitization has played a major factor in us being able to increase our reliability and performance. And then I think in addition to that, again, the partnership model with our providers and being able to get closer. A lot of our business is built around setting those providers up for success. So we are co-destined in terms of our relationship with those providers. They're the ones actually delivering the service at the end of the day. So we have to be able to set them up for success. And to do that, we need to understand what they need to be set up for success. So in terms of our ability to efficiently assign them trips, if you will, and make sure that we're giving them trips within the right market, within the right ZIP code, within the right hours of operation for them allows them to perform better. So definitely our efforts around digitization but also our efforts in getting closer to our providers and becoming more of a partner with those providers.

So just a couple of examples, like we've done, we've assigned certain transportation providers to certain dialysis clinics. They are our transportation provider for the dialysis clinics.

Absolutely.

Mental health, substance abuse, same thing because you could imagine the sensitivities associated with somebody with that condition. And so we're assigning specific companies to that. And so that's another way. The other one I would also mention, and Ilias talked about a little bit in his presentation, is this Provado product because as we looked at kind of overlaying where we have transportation providers and overlaying where we could use a Lyft or Uber or overlaying other services that we could offer them, there was white space. And a lot of the problems we were running into was that white space where we didn't have that overlap was not being addressed. And so Provado has been an unbelievable tool for us and particularly in those areas where we can't find -- and the guy who runs it, Ed Hoffman, has got some crazy ass secret sauce. I mean it's bananas like -- and how he pulls this off. And I know it sounds funny, but it's true. We're kind of all astounded by just how good he is at recruiting drivers to cover these spaces. It's something else that we've spent time focused on and are doing quite a good job with now.

We're able to stand Provado up within a matter of weeks. So with their ability to get certified in a new state, from the time it takes for them to do that to the time they're able to actually start doing rides, it's a matter of weeks, which is phenomenal. So we can make an impact quickly when we see the need to move Provado into a network.

I think we have an online question, so we'll go back to Zach.

Yes. I would mention something else we haven't talked about that, again, we got asked a lot about when we did our first our first debt deal. But these relationships we have with these states and payers are like decades upon decades in some instances. So again, I think the relationships have always been there, and that's why we love transportation, because it's allowed us to establish this relationship and acts as a tremendous conduit to bring other services to them, but there's a high degree of stickiness to what we do as well that I think is important for you to understand that. And again, as we get more sophisticated, as we expand our technology offerings as we improve performance, which we're seeing significant improvement across the board, I think that there's just more to come in. And we've got -- there were some of this -- and I don't know if Brett's going to talk a little bit about this, but there are payers where we only still have only -- we're their preferred partner, but we only have 44% of the business. And we think there's massive opportunity not just to win more contracts but also -- and they want a one-stop shop and an NEMT, too. So I think there's going to be some significant changes in terms of our market penetration in several large accounts over the next year.

Go ahead, Zach.

All right. This next question comes from Mike Petusky of Barrington, and it's to the personal care side. "Are caregivers currently compensated or incented to promote ModivCare's other services? And if not, how does ModivCare get these services into the home where a caregiver is?"

Go, Mia.

We are not compensating our caregivers at this time to promote the other services. We are educating our caregivers about all the services that we do provide. But it's new to everybody, right, because this is something that is new to us. And we are really just interested in educating them and empowering them to be an advocate for that client. And the second part of that question, if you want to remind me.

Incentives.

How is care -- how are other services promoted or being brought into the home?

I'll share this question with Jessica, but I would say that right now, we're leveraging those relationships that we have with our referral sources, which are our case managers. And our case managers are aware that we all fall under one umbrella now, but we are also continuing to lean on those existing relationships.

And we do have a model we can follow in terms of incentivizing them. We actually do within the NEMT space, incentivize within our care centers as the CSRs are reps taking calls. If they can promote other services, other modes of transit, there's incentives behind that for the CSR. So we have a model that we could expand upon as we prove that to be successful. And we have seen success in that. That's part of what's driven up those alternative modes of transport. So we have something that we can base on as we move to the other business units.

Yes. And I would say that we're always sensitive to customer choice. We want to ensure that we're giving customer choice across the continuum.

Let's go to Brooks, and then let's move on after that. We can save the other questions towards the end. So go ahead.

Talking a little bit about Provado. And it's not something I know a lot about. So can you talk about the revenue opportunity if there is one? And can you talk about the cost side? Are you buying cars and hiring drivers in that business? So just talk a little bit about some of the basic dynamics.

Yes. So again, Provado functions as a TNC, which again is kind of a fancy term for -- they use privatized vehicles. So we're not really going out and having to purchase vehicles. We are recruiting drivers. So the secret sauce that it has is this ability to recruit drivers who want to do this for the right reasons. They want that consistent work, and they're willing to serve these rural areas. So when you think about why Provado is successful for us, it can solve some gaps, some of those white space gaps that Dan referenced. In addition, their performance far exceeds some of our other kind of traditional transportation providers. And their costs typically are a little lower as well, again, which we see that with our rideshare business overall. We see that same thing on Provado. So I would say from a -- it's not so much that there's a revenue opportunity per se. There's definitely a cost opportunity in terms of our unit cost. And then there's definitely a performance element as that we can increase our performance, increase our capacity, which ultimately will lead to increased revenue because we can take on additional business and new business. So that's really where Provado plays. And we have expansion plans to go to -- I think we're in 7 states now, and we're trying to double that in the coming months.

Okay. I think we're good for the first Q&A session. And keep in mind, we'll have another one after Heath has done presenting. So thank you all for coming up on stage and doing the Q&A.

And with that, I'd like to introduce our Chief Commercial Officer, Brett Hickman; and Robert Pittman, our SVP of Government Affairs, to the stage so they can go over our growth strategy.

Thank you all for being here. I'm obviously very excited, and a little bit of my thunder was stolen here, but thank you. Nobody is more excited to be here with the opportunity that exists at this organization than I am other than probably Dan. When I started looking at this organization and the platform that they have built, especially during an unprecedented time over the last 2 years in our industry, it's amazing the assets that they pulled together that we now have to leverage and go to market and really start to drive results for our payer partners, both at the state and the MCO level, but also the opportunity initially out of the gate. We don't have to wait to get to value-based. We have so much green space, so much opportunity for additional revenue just by cross-selling and bundling our services and then moving to value-based care in a safe and prudent way. But for me, the most exciting part of this is the growth we can experience over the next 2 years, positioning ourselves for amazing growth the following 2 years as we move into real value-based care and really taking on populations and cohorts. And so with that, you think about earlier we shared is how much of health is influenced by social determinants of health. And whether we look at the 89% or we look at the 30% of unnecessary mortality related to social determinants of health, health plans are under extreme pressure to build capabilities and to create efficiencies within their organizations around things that rest outside the 4 walls of traditional clinical care. And right now, it's very fragmented, uncoordinated, and a lot of it lacks data and information to make good decisions. And we are in a unique position now, and we already are collecting, as you heard from Walt, collecting that data, analyzing that data and positioning that data to be actionable not only real time but hopefully predictive as we move forward and start taking risk. And we've got the right assets in place to do that. I mean think about something as basic as transportation. You can't age at home. You can't manage your care at home unless you know you have secure, safe, efficient transportation. If you don't, you have to be in an institution. And so for us, the basic core elements we have built -- this leadership team has built, the amazing set of capabilities that now we're positioned to go to a payer and say, "Look, we can take the risk. We can organize the data. We can give you something that's going to be really impactful to your bottom line but more importantly to the lives of these members that really need our care." And this is the piece that got me the most excited. It's a platform business, right? As you asked the question, is there other assets? Absolutely, we can plug and play important assets to continue to enhance our capabilities. But what's most important is we've expanded exponentially the addressable market that we can go chase. When this business -- when Dan took over 2 years ago, this is a $5 billion to $7 billion addressable market, right? And now we're looking at in the next 2 to 3 years, a $150 billion addressable market. And look, if you just look at personal care alone, the opportunities we have to expand -- and you said earlier, I think, Brooks, it was you, about where are you at with personal care geographic. What's beautiful about our platform that's been built is if we have a partnership in value-based care, let's say, with any of the big 6, and they say, "Look, we've got an issue. We just can't address it here, right? We don't have the assets. We don't have the network. We need you to go into this market." You've heard about Provado. You heard about how easy it is for us to go into market and expand and put those capabilities in place, real time and be up and running and be effective for that -- for our payer partner. That's the speed to market we can work at that we're now positioned to do. And this is the biggest reason I'm excited to be here. We talked earlier, I mean, we had a great question about how are we getting these services, how are we like putting other services into this. At the end of the day is member engagement is the holy grail for payers. They struggle immensely with the populations we serve to get member engagement. Did you see me and Jessica's member engagement? 89%, 60% recurring, it's unheard of in the industry, right? That type of engagement means that you can have an influence over their care and their decision-making and how they take care of their own health and well-being with you as a partner. And that efficiency, we can create by bundling those services. Think of a case manager having to make 15 phone calls to coordinate services for one member versus they call ModivCare and we say, look, we've got the core set of services. You're going to see in a slide later that we basically encompass like 80% of the demand. We can case manage the rest of it. We can leverage community-based resources. We can coordinate the other gaps in care and make sure those members get that care. And we can be that one-stop shop and ensure that those health plans' efficiencies can really improve. And so it's all about relationships. As someone mentioned earlier, we have significant relationships. We have deep relationships. I was even blown away. I didn't even realize how deep until I got in here. I mean I was really proud about all my relationships. But getting here, I'm like, well, holy crud, this is unbelievable. Talk about a metric-driven business. Ilias mentioned to you 1 or 2 items on the scorecards. I couldn't believe the SLAs on the scorecards. This is a risk, smart organization that's performance-based and accountable every single day. And they measure it relentlessly. And so we're already performing like we have to be in a risk-based organization. Now we've got to bring those pieces together and leverage the data we have to be more proactive. And earlier we said, look, there is plenty of green space here. The biggest opportunity is we have unbelievable potential not only geographically but also from a TAM perspective. But more importantly is we got to partner with our big 6 and other payers, these 30 MCOs and states, and we need to help them solve where they have the biggest issues in crisis. We need to be a good partners. And so we've got to think differently about, and that's why I'm so excited to be here, is help the organization think differently about how they work with these organizations, not as point solution vendors but as true partners organized around the outcomes of care for this population. And I mentioned this. I forget -- Bob, you asked earlier about the expansion. This is the example of one of our big 6 clients, right? We have every point solution, every capability with this client. They are a very important client to us. We still have an $800 million opportunity to expand capabilities with them. If you just look at NEMT, out of the 20 markets where they have Medicaid eligible markets for us, that -- we're only in 4 of them, and we're doing great work with them. And we've had conversations. They want to move. They are desperate to move to have one NEMT company. And we are uniquely positioned because they now see this and how we can package these services and start moving along the value-based curve with them. And they're adamant about doing that. And think about the level of conversations we're having within leadership now. It's not a vendor conversation. We're talking about having significant impact on the outcomes and the quality of their members, and they see it now. And they believe it, and they want to work with us to do that. And for me, as the revenue guy, where is the low-hanging fruit? Where do we get started? Where can we really take advantage and really have a huge impact on the market? If you think about the duals population, it's about 12 million members today. It's growing almost double by 2025, which is huge. It represents today about 5% to 10% of the Medicaid and Medicare marketplace or members, but it represents almost 15% to 20% of the actual spend. These are high utilizers. They are highly engaged and highly need our services at a pretty extensive level, and we can have a huge impact. Each one of these members conservatively could be $20,000 a year to us. That gives us a market opportunity to $5 billion to $20 billion just in this one segment. But most importantly, it's a leverage point, a fulcrum, to really expand our capabilities and our expansion of our -- we got about 15% of our revenue today from MA. Huge opportunities to move into value that we influence Stars ratings. You saw the NPS stores from our Home division. Unbelievable. If they can capture that in their data, boy, would that really help their Stars ratings, right? And so for us, if you think about the growth in supplemental benefits, we are in the right spot. This tells us that our services are growing as it relates to expansion of supplemental benefits in MA. And a little bit of a delay in a lot of this, like if you think about the CMMI program with the AHC. It got delayed, right? It launched. It got delayed with work requirements and then the pandemic. We need to be front and center. We are the one organization that can say we can bundle SDoH, take risk, improve outcomes and performance for your organization. So a huge amount of opportunity and upside in the MA side of the business. And with that, I want to transition to Robert. Robert, obviously, as mentioned earlier, is just a wonderful asset, and I'm so proud to be his partner now. Robert was very influential in getting codification of NEMT services and making sure that we are well positioned to be the leader in that space. But as you all know better than anybody, working with states is unique. It's a special skill set. He's a special guy. So I'll let him come up.

Special, I'll take that. Excellent. No. So Brett kind of set this up right. The focus up to this point has really been on the commercial side of the business. But I'm kind of here to talk about states, which, as he alluded to, a completely different animal requiring a fundamentally different approach, right? For the last 12 years, since I've been with this company, we've experienced tremendous growth. And it's really been a product of our focus on developing key relationships with government officials, lobbyists and industry groups throughout the country to further the company's business interest, right, predominantly focus on NEMT. But it's that infrastructure that is so critical as we seek to shape our future around SDoH and bundled services with states directly versus payers. Now as this slide indicates, roughly $300 billion a year is spent on home and community-based services with 57% of those dollars coming and flowing from Medicaid. State waiver authorities, as Brett alluded to earlier, provide ModivCare with a tremendous amount of opportunity to expand not only NEMT but our bundle capabilities that states really, really lean into value-based care and value-based purchasing models, right? And I think you alluded to this as well previously. And with the elimination of work requirements from the Trump administration and the COVID emergency orders kind of going by the wayside, states are finally in a position to focus on investing in those key SDoH services to focus on enhanced access, improved health outcomes and ultimately, the main goal here, reduce total cost of care. But the point here is not really the opportunity. So while the opportunity for growth is strong, the real key to our success here is going to be our investment in public policy and lobbying with the right states to ensure the right investments in SDoH programs are made so that we are in a position to capitalize on those. But speaking of public policy, right, and lobbying, we have a tremendous growth opportunity in our core NEMT business. So let's not lose sight of that. On the state side alone, we manage contracts in 15 of the 31 viable state-based markets and have a very clear and distinct road map for growth representing over $500 million in new opportunities through 2025. And we are, as we speak, investing in our resources and the infrastructure to ensure that happens, right? So a couple of things here. Key takeaways for me and I think for everyone here is that our size, scale and long-standing relationships that we've been talking about this entire day with state governments really provide us with a unique opportunity. With the future of a core business being strong and growing on the NEMT side, we're uniquely positioned to leverage our relationships with states to expand our bundled capabilities and aggressively, really aggressively, pursue those value-based opportunities that will further separate us in the market. We know they want it. They're telling us they want it. And we're uniquely positioned to provide it. So with that, I'll kind of turn it back over to Brett and allow him to talk about what some of these pilots are ultimately looking to solve for and how we get from here to there.

Brett's special, too.

Brett's special too, yes.

I know the actual code sections. ACA sections 1905, 1914, ANI and 1945. It's codified. And the CMS came out in January of last year and gave specific direction to the states of how they can move into SDoH and value-based care. It's -- the market is sitting there waiting for our set of solutions. That's why I'm excited. So I've been doing this for a long time, as you probably can tell. But end of the day is we need to start moving into really significant pilots with our payer partners. We need to be with them as true partners in the markets where they're having issues and challenges to be able to prove this out and build the capabilities around these partners. We've already got a couple of pilots. We got great results, and now we can build on them. And we're already having those discussions at every one of the big 6 organizations as we speak. From a time line perspective, this takes time, right? As you move it, you got to do it the right way. You got to do it prudently. So from a revenue perspective, we get our pilots up and running over the next -- in 2023. We start moving into real risk, and we start receiving dollars in late '24 and '25. So we've got a clear road map of how we want to move along this continuum. And it's no secret of how organizations work through this process, right? Now what we will never be is full premium capitation. We're going to take a sub-premium capitation as payers allocate more dollars from clinical to nonclinical. We want that premium. We want that risk, and we want to perform and drive results. And we want to share in those results with our payer partners and our state partners going forward. Today, we are heavily involved in capitation, as we heard earlier, with PMPM and performance-based contracts. We have the DNA and the skill sets internally. It's how we think as an organization already. We think about performance every day, and that's how we interact with our clients as we -- every day as we're working with them. So we'll continue to move up this continuum as we move into a bigger array of value-based capabilities. So -- but we're not going to stop. Today and tomorrow, cross-selling and bundling our capabilities, we're not going to let off the gas pedal. As Dan mentioned, the $3 billion is the low-water mark. You saw what the TAM is for this space. You saw our set of assets. If you're not as excited as I am, you're missing something. We have an unbelievable opportunity to move along this continuum, and we're going to do it in a really prudent way. Then we're also going to do it in a smart way. We're going to do it in a way that adds real value to our partners, both at the state level and the payer level. So thank you very much for giving me the opportunity to come up. Robert, thanks. We're going to introduce -- you all know Heath already, our CFO. So now all the boring stuff comes up. I'm in trouble later as you know.

Thanks for having me back up here again. So the first thing you'll see here is there's a slogan, no margin, no mission. It's actually -- if you come to the office, you'll see that on my wall. And Dan's like, "What does that mean?" Well, it's actually at our core. If you listened to me and Jessica, no question there's a mission there. And the mission is key to us having the success. I think though, great health care services companies need to perform. You need to have great business people as well. So that's the -- and it's all connected. It's a flywheel. You have a great mission, you get a great margin. You have a great margin, you have a better mission. So it's at my core. I'll show you my tattoo later. So what I'm going to do here as well is -- well, obviously, Dan talked about the 3 and 3, $3 billion in revenue, $300 million in EBITDA. What I'm also going to do is simplicity, right? So Einstein said, if you don't understand it, you can't explain it simply. You haven't explained it simply, you don't understand it. Well, as all of you have been saying to us, that's what you want. So we're going to show our businesses, all the great stuff that we're doing. We're going to break it down and make it simple for you to understand and then again, measure us on a quarterly basis with that. So a couple of key takeaways you're going to see here: our strong, consistent cash flow generation; profitable growth through 2025, 7% to 10% revenue growth that's durable and recurring that we've heard about; and then that continued transformation of our strategy, which is going to have us move into the home base. And again, this 3 and 3 is today based on what we have today. It's not including the data opportunities nor is it including the value-based opportunities which are larger. So the one thing that I have also -- that I have completely failed at as well, but that's on purpose, is that I'm giving a deck that doesn't make sense to present to a large audience. But what you'll see in this information that I think just got posted to our website, there's a lot of data and information that I know you guys are all going to like. So I'm going to -- this one slide, though, right off the bat is something you've all seen many times before. And I'll just -- a few different highlights that I want to point out here. So this is where you see on the revenue side growth, growth and also diversity. NEMT used to be 100%, 69% now, 28% personal care and remote monitoring growing. And then you can also see, and Dan also talked about this when he came, $51 million in EBITDA. Now TTM basis, all these assets together on a pro forma base is $225 million. So growth and diversity. So the next slide. And I'm going to see people squinting up here and can't wait to read this. So the next part, I'm going to walk through each segment, and we're going to give how we make money. And then there are going to be a few slides after that, that show our key metrics on how we make money. So we'll start here first with our NEMT segment. So a lot here, and I'm just going to be high level. So we're going to break down how do we calculate our revenue. What are our costs? We'll get to a gross profit, and then we'll get to that ultimate adjusted EBITDA. I'll spend a little time on this slide because this is the one we get most of the questions on. So what we will be disclosing, and you'll see here on the revenue side, we're going to give you membership, and we're going to give you revenue per member per month. And that will allow you to really understand. In addition, we're going to give you those 2 numbers. So all the discussions we've had around our contracts, 85% capitated, 15% fee-for-service, half of that 85% is kind of pseudo-capitated. Well, now we're giving you the metrics on a quarterly basis. And if there's any change in that, we're going to explain why. So now you'll understand and you'll see here, you can kind of see in the 2021, for us right now, 30 million members. In 2021, we had $4.13 of PMPM, first time you've seen that number. And all this will lead to when we start doing this, we're also going to give you this long-term guidance, the 3 and 3. But specifically for NEMT business, the revenue growth is going to be 7% to 10% on a CAGR basis. Moving down to the transportation cost side, a lot of questions around what is utilization and then what are your costs. So we're going to be providing that. And specifically under the 2021 -- we haven't done this before. In 2021, we had 7.6% utilization. Our cost per unit was $36.34 per trip. We're going to be giving that on a quarterly basis. And what that result in, you can see here, in 2025, we expect utilization to go up to 9% to 10%. I'm going to get into that. It's an important point that I know you'll ask me about. Where health care is today, with what COVID has done, with what services like telemedicine have done, with mix changes, we're going to be at 9% to 10% utilization, which results in about a 71% to 72% cost. Just moving down, there's a lot within this under other services as well. With our leverage, with our cost optimizations that we've done for the last couple of years, we're going to get scale, and we'll be at that 11% to 12%. And all of this will result in us getting to a margin of 9% to 12% margin on a recurring basis through '23 and '25. So now this is how we make money. And I want to give you some confidence on some of these metrics, specifically on membership. What is membership going to be? So we have 3 -- 4 different things that I want to talk about here. First, the existing health plan growth, it will be that 3% to 4% range on a CAGR basis. In addition, we're going to sell. And we're going to sell both on the MA side, and we're also going to sell on the Medicaid side. And the other item, which is probably going to be a question here, which we're all knowing about right now, we know that there's redetermination on the Medicaid side. We're going to grow above that. We know that it's going to be about a 10% to 15% drop. And for us, we have that accounted for. And as you can see at the end, with the membership growth that we will still grow membership about 3% to 5% through 2025 on a CAGR basis. The other item. There's a lot here, and I know you guys are squinting to see this slide and look forward to seeing the deck. But this is the discussion, and really around NEMT, we've talked about it a lot. There's been a lot that have happened in the business over the last couple of years to show the durability and rigidness of our earnings. This will give you some more data to understand that. And this is really the overview on what we think utilization is going to be. And we've provided historical context to what utilization was and what we think what it is today and what it's going to be in the future. So you can see here on the top left-hand side, that utilization in 2019 was close to 13%. It won't be there anymore. It's going to be -- right now, in 2021, it was up about that 7.6%. It's going to land in that 10% to 9%. But why? Again, I talked about this a little bit before. Virtual visits, 2019 were about 3%. They've grown 5x. Another example with our data, right now, our mental health visits are down about 35%. So you put that together with what has changed because of COVID, and we mentioned this a little bit, our adult day care is down. bps down, but those bps really matter because now if you think about it, not as many people are going to adult day care because they're staying in their home with their family. So all this together -- and by the way, so it's not just us doing this. We spend a lot of money on consultants and analysis and data people. We feel really good about where utilization is going to be at that 9% to 10% range. So I think that covers most of it. The one other thing that is an important part, and we'll be talking more about this around utilization, our contract mix has changed. The bottom chart shows that. Pre-pandemic, we didn't have a lot of MA. Now we have more. And that's going to continue. So the point of all this, we haven't given you this data before. We're going to give you this data on a quarterly basis. So hope -- so you can understand how we perform every quarter. In addition, the expense side, another important item. I'll focus on one part here. It really is the top left corner, which is our cost per trip or unit cost. You see historically where we were, $32 and down to $31 in 2019. Today, 2021, $36. And we know the reasons why. Labor, fuel, just general operating costs. You can also see in this model, we actually don't expect it to come down. That's in our numbers today. So our financials today show this large cost that we have. However, the initiatives that we are doing, and we talked a lot about -- Ilias talked about this, the multimodal strategy that's really going to result in improved member experience. The other thing that it does for us, it actually reduces cost and it kind of makes sense. If someone is going to drive themselves or have their family member drive and get the IRS reimbursement rate, well, that's anywhere from 5 to 10x lower. So our strategy is around mileage reimbursement, public transit and what we're doing around reducing costs just in general. I'm estimating in our model right now that we think just based on costs that we could increase cost by 3% to 5% a year. I think very conservative. Well, we're going to offset that with these initiatives. And if you did the math on these initiatives, we actually can get a benefit. But in the model right now, what I'm showing you is that we expect that unit costs will be about flat to where we are today. All right. So that's NEMT. A lot to talk about, and I know you'll be talking about this a lot. You'd be talking after around how do you update your models. The PCS business, very simple business, hours and cost. So again, on a quarterly basis, we'll be telling you what our hours are, what our rate is around that or reimbursement per hour. And then we'll also talk about what it costs, what costs were flowing through that we're paying our caregivers. So with that, that will result in a 7% to 9% CAGR through '22 and '23 -- '23 and '25. Our fixed cost leverage that we will get here in the bottom will be 11% to 12% that we start getting scale on. All this will result in 10% to 12%. So the point here again is that 10% to 12%, we're going to show you every quarter with the hours and rates and costs that we give you. So again, the believability of these metrics. Historically, you can see here versus COVID, we have a 20% chance just to get back to pre-COVID levels, excluding the additional items that we are doing today and tomorrow around recruitment. So the point is our growth rates that we have here, very achievable in the context of if we could just get back to where we were pre-COVID, those growth rates would be exceeded. A bridge from '23 to '25. Reimbursement rate, as we talked about before, 3% to 4%. Normalized hours, another 3% to 4%. And then when we do the de novos, open up those locations and those areas we don't have, we're just estimating a small 1%. So a very reasonable rate of 7% to 9% revenue growth for our PCS business. Remote monitoring, also a simple business, but we'll be starting to give you more metrics around what are the contracted rates, what is the variable cost. And there's a lot within here, but I'm just going to focus on some of the metrics as well. So the 14% to 16% CAGR per year is what we're estimating. The other item you'll see in the service expense, and I want to point this out because I think it's important. In 2021, we have service expense that was 34%, and you're going up. We're estimating that we're going up. So that's in our model. But why are we doing that? And if you heard Jessica, if we invest the amount of just investing a little bit more into that business, the bang for buck we get around growth, we're going to get. The point is we're doing it and we're investing. We're not just doing it to cut costs. So we're going to be investing, and we're going to be increasing our service expense around that. What that results in, again, is strong, strong margins of 34% to 36%. So a little more detail. How do you do that? What is your revenue bridge for RPM? Our base business right now just for the markets we're in, growing 6% to 7%. And our PERS contract wins, about 4% to 5%. And then the new E3 and vital wins, another 4% to 5%. So that's an easy bridge to the mid-teens revenue growth that we have. All right. So where are we? What's the -- how does this all come together? Where are we today? So from a consolidated outlook, everyone -- you first go, where are you going to be for '22 or halfway through? So our '22, this is going to be consistent. I think all of our great analysts that are in the room are doing a good job right now. So we're basically just confirming everything that you guys already have out there. But I'm saying it is guidance. So you guys, be happy for me. You guys have been asking for a while. So our revenue, $2.35 billion on the low end and then $2.375 billion on the high end. Adjusted EBITDA, $203 million, $213 million, and you can see the related margins. And the other items that we built up from the previous slide, getting to 7% to 10% growth on the revenue side at that midpoint 10%. So a very reasonable and understandable organic growth without acquisition, without value-based care opportunity at the end of 2025, the 3 and 3, the $3 billion and $300 million. So rightfully so, the next question is around the balance sheet. What's happening with the balance sheet? So on the top left, just explaining a little bit in 2022 estimate of adjusted EBITDA to be around $208 million. We know cash interest, taxes, CapEx, that adjusted free cash flow gets you to about $100 million a year of adjusted free cash flow. We have strong -- we have those strong credit metrics, and as noted earlier, very low capital requirements from a CapEx perspective. And then the other item that I want to make sure I share with you today is around our contracts payable. I've consistently been saying that we're going to be paying off $100 million to $125 million. We've appropriately negotiated predictability on that, and we expect to pay that $125 million off ratably and kind of throughout the rest of this year. So where does that lead us from a leverage perspective? At the top right. So 2021, we were at 3.7. Today, an estimate at 2022 because of the great assets that we bought, we're at that 4.4. And then you can see from there, if we don't do anything else, we're going to delever. Strong cash flow that we could decide to delever. So '23 time, anywhere from that 3.5 to 3.8 range. And then the other item, our 3.0 target is very reasonable. And you could do your math to see that how quickly we can delever as we continue to generate cash flow. So again, durable strong cash flow with a balance sheet that has this ability to delever. The flexibility can be opportunistic, so strategic capital allocation is what we'll be able to continue to do, which leads me to one of the last slides. So from a capital allocation perspective, what are our priorities? And you can -- organic growth, we can do it now. Our best dollar use is to grow organically. We will continue to do tuck-ins. Of course, there's -- in this space, there's a lot of opportunity. We're inquisitive. We're smart. We're always going to be close to how we can think about anything broader. And share repurchases and debt are always in -- debt repayment are always an option. The other item on this page, and this is illustrative. It shouldn't be unreasonable in 2025 or sometime in the future that our home business is 65% of our revenue and mobility is 35%. It's not that mobility is not important. It's not that we're going to grow. The opportunity for us and the market share for us to grab and really execute on our strategy of being the premier social determinants of health company is in the home space, too. So we think that, that could be close to 65%. So finishing off again, by 2025, 3 and 3, $3 billion in revenue, $300 million in adjusted EBITDA. Strong revenue growth, 7% to 10% range, with the margin expectation of 10%. So I look forward to talking to a lot of you after. I can't say how proud I am to be part of this team. And again, I look at these numbers. I'll digress a little bit because we've done models up and down. And the hardest part we had is actually how to make sure that this is reasonable, reasonable based on where we are with our current assets. So all the stuff that we're talking about with Brett, we have a high-class problem, how to model those in and predict what the future is going to be. So thanks to everybody for coming. I look forward to spending more time with everybody. So now I think it's the second tier of questions. Finish off questions on the financial side or anything else that you want to talk about.

Okay. This is the Q&A part 2. Anybody have any questions on the audience? Let's go to Brooks, right up front.

So one area that I think a lot of people are confused about is the contracts payable. And just talk to us a little bit about what that is, how the conversations have been going with the people it's payable to and how you view the ultimate realization of that liability.

So the contracts payable are the result of the capitated contracts that we have. About half of those capitated contracts have a provision that we get paid on a PMPM basis. And that's what we've been getting based on that. But there's some provisions in there that say you can't take that to income. So we actually stick it on the balance sheet. It shows up on cash. And it keeps growing, growing and growing. So my point is, from a P&L perspective, what you've seen historically and what you're seeing today and in the future is going to be very consistent. So modeling P&L makes sense. However, we got these cash flow that has come into the business. And the way it works, depending on the contract, we'll pay that back over 3 months, over 6 months and then sometimes not until the end of the contract, which could be anywhere from 2 to 5 years. So that's why it's been lumpy for us. We have some clarity on that now. So which is why we feel really good about this large amount being paid back over the next year. And then within that balance, you're going to see that continue to fluctuate. And we'll explain that on a quarterly basis how it's fluctuating because the contracts are operating as designed. So I expect it to go up, go down. The lumpiness gone this year, and there will be normal kind of ins and outs.

I understand that.

Yes, yes, yes. I would say it is a complicated thing to understand because really, we have a lot of these contracts, and it's very state or MCO specific. The takeaway point again here is, after this year, the $125 million will be gone, and then it's more predictable in and out. So our cash flow will be easier to model because it will be more representative of our adjusted EBITDA that comes on.

Go ahead, Bob.

Heath, thanks for all that detail and for all the work that you're giving us now to do. I appreciate that. Maybe just to help simplify on the NEMT side. So it makes sense to expect utilization to continue to increase. It also makes sense that it won't be quite as high for the reasons you stated. But with utilization increasing, what are the biggest components to enable margins to increase also? And you had a chart with other OpEx down or whatever, but there's -- it was a little quick. So maybe just simplify, walk us through the costs coming out to offset the utilization increase and enable margin growth in NEMT?

Well, so first on the utilization increase. And I should have talked to this a little bit before, in one of the questions that was asked earlier. We have the -- we reprice our contracts either once a year or sometimes depending on the contract, could be every 3 to 5 years. My point there is that we're repricing contracts. And no longer is it about -- is it transactional. It's about your service. It's about the customer experience. It's about the investment you made in tech. So we have seen consistently, I don't know when I first got here, rightfully so in the middle of COVID and even historically where this market has been, everyone's like, "What's happening on pricing? Are you getting beat up? Are you giving money back because of these contracts payable?" We haven't. It's been minor. In fact, we've gone the other way. We've gone the other way, so that's a lever to pull, and it's happening today. This is an important point. I want to make sure we bring this. NEMT is a business that our payers care about, one, because we know what it does for benefits. The other item, it's messy. It's messy and complicated, and they need a partner that can figure it out. Because if it's not done right, the actual CEO gets a call. So the beauty of that is that we can get meetings with the CEO. Dan and Ilias, we're with the CEO of a payer...

A month ago.

And that's where we learned, hey, when we get this right, like we're getting it, this is why we're going to give you the rest of the business. The other item. I was with a payer. We were doing planning session on how to grow their MA business nationally, 8-hour working session with them. And it was primarily around transportation. The other thing they said, "If we do what we're planning to do, Heath, we're just going to give you everything else." My point there is, is that the relationships to the CEO level is enabling us to make sure that we increase the pricing. So if utilization was to increase another 1%, the amount of negotiation that I need to increase on our contracts is in the single-digit range. First lever to pull, and we're doing it today. So that's why I feel really good. The other items which you see, well, we're primarily fixed costs. We're starting to get leverage around our fixed cost structure. The other item that Walt had talked about as well and is a big part of what we've invested in the last couple of years, our technology has gone up. Well, we're going to work through that. I actually expect that to come down about 20%. And then the last item, storm and lightning, you've been hearing it from Dan and the team for the last 2 years. Those have taken hold, real tangible cost savings. And the easy one to always talk about is what we've done in our contact center, one from efficiency, reducing headcount, to BPO-ing, to containing calls and not having to talk to agents. So all that together, which is why we feel really good about our margin range of that 9% to 12% on the NEMT side.

And the other one that he referenced was ineligible ridership because that's gone to 6% down to 1%. It's almost -- it's somewhere between 0.5% to 1% of -- we look at that 13%, and why is it going to be 9%, 10%? Well, that's part of the reason, too. And that was part of storm.

Correct.

Follow-up, Bob?

Sure, kind of follow up. And then I'll -- so I forget, I think it was Robert, referenced the opportunity of $500 million. And you've talked to it before, new potential wins over the next few years. What -- maybe tying in some of the stuff you showed us today, when you go to bid now, what are you bringing differently than 2, 3 years ago? How has it changed winning percentages? And then what's the insight into that $500 million, like rolling in? Or is it -- we've talked about one large contract that should have been awarded months ago, months ago. Any updates on that? So all of those for the -- your new bid strategy, how are you received and then insight into that $500 million, please.

Do you want to go?

Sure. On the bid, our approach on NEMT is that all the automation we've done, the consumer experience and our performance, right, and our relentless pursuit of better performance going forward with them, that's getting the expansion opportunities. And we've heard directly from all the big 6 like, "We want 1 provider. We want someone we can go to for all these services and not have to go market by market." So those discussions are continuing to give us some great opportunities for future growth. And I think the contract, I wouldn't...

Yes, I think -- yes. So on the -- what I would say is I think there's, at this point in time, actually a larger opportunity within our big 6. There are accounts where we're the preferred vendor and yet we have 44% of the market. And there's -- it's clear they would prefer us to have all of it. And again, I think we're in a really unique position now because of a lot of the other things we're bringing to the table and the fact, I think with Ilias and others, we've resolved a lot of the issues. It's -- I don't want to underestimate this, but when Walt got here, I mean, it was -- we had a 30% error rate on our reports. And it was just like every week, we get a message from United or Centene, like Humana, Anthem, like, "Oh, my God, what are you guys doing?" I got another X number of reports you've done on a monthly basis, but that's by and large gone going away. And that took us a long time to get there. The encounter data information and that we have not made as much progress on, well, that's largely behind us as well. And the reason I bring this up is all this stuff adds up. The service levels at 97%, it adds up. And it allows us to say, hey, listen, we're ready to have that broader discussion now. And we're not just chasing our tail because when I got here, we were chasing our tail. We're just running around, trying to hit one whack-a-mole after another. And so anyway, that's what I would say, Bob. And so what does that mean? Well, if we're 60% now payer versus 40% state, I actually like that because I think there's significant opportunities for us at the payer level. I think those relationships, because they tend to be a little more strategic at this point in time, how they're looking forward in combining these services is, I think, broader at this point. I think that's going to be a real benefit to us. And then on the state side, we go through all these RFPs. And again, we're in a really good position in most instances. We have those existing relationships. Or if there is an RFP like there is in a couple of other states, we are -- we're in a good position to win those states. And there's a couple of those coming up over the next -- over the course of the next couple of years.

Yes. We're very focused on process. We know when all the RFPs are coming out. We know when the renewals are, and we are now engaging much earlier and having an attack plan of how we prove performance and how we look at ModivCare differently than NEMT business, right? And that's really resonating. But we are -- we have the entire road map for the next 2, 3 years on every renewal, every RFP that's coming out from an NEMT perspective, both state as well as MCO.

Good. Let's go to Jack at Jefferies.

Wanted to dive in on a couple of components of the growth strategy. So maybe the first one on the dual eligible population, $20,000 per year revenue potential. It's a pretty big figure. Could you just disaggregate sort of what the build is to get there and what the different components are across the offerings you have?

Yes. So if you think about it, the biggest piece of that is going to be PCS and then monitoring and NEMT along with meals. So that package makes up more -- and the biggest piece of that is on the PCS side, on the personal care side, to get to that $20,000. And the reason we put all 4 of those pieces in there is that population, 80% -- you saw the growth of those benefits. They require all 4 of those components. So again -- and again, it could be high as $36,000, and we're being conservative at $20,000 per member per year. That's a good question.

Got it. That's really helpful. And then the second one, more on sort of greenfield opportunities, and I'm thinking to your NEMT business and the mix of the actual rides. So we're seeing risk-taking providers along a variety of spectrums, one of which being kidney care that's moving really, really quickly with one of those companies being right across town here. So is that potentially a greenfield opportunity you've thought about, is direct contracting with at-risk entities rather than the plans themselves as you look at specialty areas like kidney care where the PMPMs are very significant and there's a lot of dollars can use to attack and save money?

Well, think about United, right? I mean how much of their MA book, the risk is already fully delegated to Optum Care? We're in those discussions, right? Those large risk-bearing entities out there, even on what we'll call an acute setting like with renal and dialysis, right, we're having those conversations with those major players, including the one you mentioned that's here in Denver, about how do we partner with them better and if they're at risk, how do we actually partner with them to help them improve their performance. So -- and we can participate in that. So that's great.

And one last one that I'll sneak in just on the structure of the value-based contracts moving forward. It sounds like you're trying to sort of build a SDoH benefit that you would then sit as a benefit manager. What's the thought process on how to potentially be rewarded for savings that happen outside of that ring-fenced bit of spend, right? Because obviously, you showed all sorts of great examples of how even if you're not actually initiating the clinical intervention itself, you should -- you're probably the reason that there are the savings there. So what's the thought process in getting that?

Yes. That's a great one. And that's part of what the pilots are for because what we need to be rewarded for and we've got approved, we deserve it, is getting rewarded for what's improving on the clinical side of that premium, right? And I'll give you a great example. The evidence-based medicine is clear that if -- for these high-risk, high-need Medicaid patients, if they can get to their primary care physicians at least twice a year, so those are the ones that are going to the emergency 12 to 15 times a year, we can reduce it to 2. So think about that. And what's the major reason that they're not getting to their primary care? One of the biggest reasons is transportation. They can't consistently get to it. So in my prior experience, when we sat and looked at the #1 reason for cancellations are no-shows, it was transportation every time. And so for us, we can have a huge impact. And think about the personal care business and home monitoring. If we can intervene very early, think of CHF, right? If they're on the scales and we start to see some weight gain -- it's not the puppies this time, but it's a real weight gain, right? We can intervene and call them up and say, "Hey, something is going on." And it may be a dietary thing. It may be social isolation. They just need some coaching. But we can make sure that member gets to the right place versus them crashing and calling 911 and ending up in the emergency room and having a 3- or 4-day stay in the hospital, right? Our job is to get them to the right service of care. So the biggest channel, if you think about where risk-bearing entities go, the one thing they're focused on is right side of care, right, is getting it from the expensive to the appropriate level of care. And we can play a huge part in that. We can own that navigation, that care management component of it.

Excellent. Any other questions? Jess, upfront. Mic is coming, Jess.

On the PMPM pricing in NEMT, how does it differ between Medicaid MCOs, Medicaid state and Medicare Advantage?

Yes. So first, probably the biggest driver is the type of service we're providing. So in certain states, there's certain -- there's just a mix issue. So if there's a population that is heavily adult day care, it would be X. If there's a population that needs a lot of stretcher ambulance, it would be Y. So the level of service is primarily the main driver for what that PMPM is going to be. And then after that, it really is either relatively consistent depending on the type of contract we have. So if it's full risk contract, we're going to get a higher PMPM. If it's pseudo, a little bit lower. So it really is then you layer on the risk discussion after that. And so level of service, risk, in general that is pretty consistent. It hasn't been in the past, but now it is because we're negotiating more appropriately.

Any other questions? I think Zach has an online question in the back.

But the one thing, sorry, Jess, I'll say it here, what we're doing now. So we're giving you the total contracts together. So every quarter, we're going to give you that average number, which we know is the -- is not easy to understand completely. But when it changes, we're going to tell you why. So you're going to see the total number and understand how to model our business and the fluctuations that we have. We'll say, oh, it's because we picked up a new contract or utilization changed over here. So the transparency around how we're performing will be more clear with that metric and other metrics that we just talked about.

So another question from Mike Petusky, "How has the change in the interest rate environment impacted your thoughts around capital allocation?"

Well, I would tell Mike, I mean, we look pretty smart right now when we did those debt deals. So I would say that. And I know that we're saying that a little facetiously. But I would say we really don't -- from our standpoint, our goal is to get our leverage ratio down. We are not planning to use debt. We were aggressive with debt because we knew that, first of all, we're in a good position because we didn't have debt previously and that we wanted to move quickly, and we felt that raising equity wasn't a good option. And we don't -- and so the things we're going to be looking at, by and large, we believe we're going to be able to pay from our balance sheet, and that's our plan. Yes. There isn't -- it's no different than what we did with Guardian, right? We paid that out of our balance sheet. And we would suspect that the deals we're looking at right now, our balance sheet is more than adequate for us acquire those entities.

The follow-on question probably will be, so interest rates are the next -- recession, right? That's probably in someone's mind, recession, right, so not good for a country. For us, though, really recession drives people back into Medicaid. Recession for our population that does our work, they need to go back to work. So unfortunately, a recession time for the country, for us, can be beneficial from what it means to us in the Medicaid population as well as getting our hourly people back to work.

Any other questions? And if not, we'll wrap up this session and let Dan close the meeting.

So first of all, again, I just want to thank all of you for being here today. I appreciate your attendance in person. There's -- as you probably can tell, there was a ton of work that went into this. This is the first one with this team. So I will say if you've got feedback on things that we can do better, we're certainly very open to it. And ultimately, you're customers. And the voice of the customer matters for you, too, and we want to make sure we're meeting our customers' needs as well. Hopefully, you also got a sense of the excitement we have around this organization. This is -- we are a really, really unique company that kind of has all the right stuff to do pretty extraordinary things and ultimately alter health care for our country and address some of these persistent health and equity issues that for those of us who've been in health care know that exist. And we know that ZIP codes matter more than genetic codes, which, I think, should be an embarrassment for all of us. We have adjacent ZIP codes. Our life expectancy is 15 years less. And the only thing you can attribute that to is they live in that ZIP code, that person is in that ZIP code. And I also think -- I hope you got a sense of the quality of people that are on this team. This is a really extraordinary team. And a lot of these folks, it's the first time they've presented in front of investors, and I think they did a terrific job. But I think what you see is what you get. And these are folks that are obviously very committed to really doing exceptional things here. And they came here in many respects because there's opportunities to do extraordinary things above and beyond what has been done in health care. I'd also say we also know that, listen, the SDoH flywheel is only accelerating. When I -- when -- the group that spoke about Biden's health care plan and what he was going to do, the first thing out of their mouth was SDoH. First thing they said, we've got to deal with health and equity, and we've got to deal with the social determinants of health because that 11% that's driving 60% of the cost is not getting it done. It's not working. All we do is see cost increases with not discernible outcome improvement. So we know the model that we built doesn't work. And that's, again, where SDoH plus clinical comes in. And again, I think we're in an extraordinary place to do that. I think you're also aware of the assets we've acquired were great. We did it quickly. We did it during COVID. One of the books I love is Jim Collins book on -- there's several, but there's one in particular that I love, is Great by Choice. And he talks about return on luck in that companies that are more successful than companies that are less successful don't have more luck. They just -- they take advantage of the luck they have. And I think we have this window that we said, holy -- I'm on tape, so I won't say that. I'm glad I caught myself. But we had this window of opportunity. We ran to it. We ran to the roar. Now we've got this asset that's not like anything else anybody else has in this country. And lastly, we've got 32 million members. We manage 10% of the U.S. And again, I don't -- again, as you think about a company like us -- well, find one. And we also know the best is yet to come because data collection, data analytics, data insights, value-based care is the future. And I think we've got a platform business that's extremely well positioned to do those 2 things, which we know people are going to award a premium for. They were awarded premium for them in multiples. And if you don't believe me, just talk to Brett and Cityblock. And again, another really good organization, but they've moved to this value-based care, and there's a multiple. And they deserve it, and we deserve it. So with that, again, thank you for being here. I hope you all do come to where our office is, 0.5 mile from here, 0.25 mile, you can walk or you can take a bus. At what time do cocktails kick off?

5:45.

5:45. If you get there a little early -- I'm sure not going to be. So if you guys -- but again, thank you very much for being here. We appreciate your attendance. And again, we would welcome your feedback as well. So thank you very much.