InnovAge Plunges To A 52-Week Low After Audit Sanctions In Colorado; Pulls Guidance

The Centers for Medicare and Medicaid Services (CMS) has determined to suspend new enrollments at InnovAge Holding Corp's INNV Colorado centers based on deficiencies detected in an audit.

• The audit was conducted earlier this year, and the final results have not yet been disclosed to the Company.
• CMS identified the following deficiencies, including a failure: 
  • To provide all Medicare and Medicaid covered services and other services determined necessary by the interdisciplinary team (IDT).
  • To provide care that meets the needs of each participant across all care settings, 24 hours a day, every day of the year.
  • To ensure accessible and adequate services.
• CMS indicated that the suspension would remain in effect until it determines that the Company has remedied such deficiencies to its satisfaction.
• The Colorado Department of Health Care Policy and Financing (HCPF) has verbally communicated that they are also issuing sanctions in conjunction with CMS and will provide a written communication, identifying the deficiencies specific to Medicaid.
• As a result of the enrollment freeze, the Company is withdrawing FY22 guidance.
• In its latest earnings release, the Company anticipated sales of $712 million - $725 million and adjusted EBITDA of $60 million - $72 million.
• Price Action: INNV shares are 27.3% at $6 during the premarket session on the last check Thursday.