InnovAge Holding Corp.

Thank you for standing by, and welcome to InnovAge's Fiscal 2021 Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your touchtone telephone. Please be advised that today's conference may be recorded. Should you require any further assistance, please press star zero. I would now like to hand the conference over to your host, Director of Investor Relations, Ryan Cabata.

Thank you, Operator. Good afternoon, and thank you all for joining Innovage's Fiscal 2021 Fourth Quarter Earnings Call. With me today are key members of our leadership team, Maureen Hewitt, President and CEO, and Barb Gutierrez, CFO. Today, after the market closed, we issued a press release containing detailed information of our quarterly and annual results. You may access the release on our company website, innovage.com. For those listening to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, Tuesday, September 21, 2021. and have not been updated subsequent to the initial earnings call. During this call, we will refer to certain non-GAAP measures. A reconciliation of these measures with the most directly comparable GAAP measures can be found on our fiscal fourth quarter 2021 press release, which is posted on the investor relations section of our website. During our call, we will be making forward-looking statements, including statements related to our growth prospects, regulatory, and other expectations in our outlook on fiscal year 2021-2022. Listeners are cautioned that all of our forward-looking statements are subject to certain risks and uncertainties that can cause our actual results to differ materially from our current expectations. We advise listeners to review the risk factors discussed in our IPO prospectus filed on March 5, 2021, as well as our upcoming Form 10-K Annual Report for fiscal year 2021, that will be filed with the SEC on September 22nd, 2021. After the completion of our prepared remarks, we will open the call to take your questions. I will now turn the call over to our President and CEO, Maureen Hewitt. Maureen?

Thank you, Ryan, and thank you all for joining us this afternoon. I'm pleased to report that we had a strong finish to our fiscal year ended June 30th, 2021. Let me first provide a brief summary of our performance. Barb will provide additional details on our fourth quarter and fiscal year end results, as well as an update on our fiscal 2022 outlook in a few minutes. As of June 30th, 2021, Innovate served more than 6,850 participants. This represents a nearly 7.5% increase year over year and is just over the midpoint of the guidance we provided last quarter. On our last call, all of our innovative centers in the western and central regions were open, and we expected to open our centers in Pennsylvania and Virginia shortly. I'm pleased to say that we are able to open all of our centers to our participants as of July 6th, consistent with the national decline in COVID trends. We reported strong revenue of approximately $638 million for fiscal year 2021, exceeding the high end of our guidance estimate. This represents an increase of approximately 12.5% compared to the previous fiscal year. We also reported a center-level contribution margin of 27.3%, or approximately $174 million for fiscal year 2021. This is an increase of nearly $33 million compared to fiscal 2020. I will now provide an update on our growth strategy. We have sites selected with signed leases for three de novo centers, one in Louisville, Kentucky, and two centers in Florida, one in Orlando and one in Tampa. In all three sites, we are renovating or plan to renovate existing buildings and we are diligently working through the development process. We currently expect these three centers to open in fiscal year 2023. However, as with every development, there are factors beyond our control that may impact our expected timing. We also continue to evaluate locations for two additional centers, and our current plan is to have those operational within the next 24 months. Regarding acquisitions, We continue to pursue acquisition opportunities in new markets with experienced community partners who have established footprints and where the economics make sense. We are also continuing to look for joint venture opportunities that provide strong strategic value. Last month, on August 4th, we announced an equity investment in JetDoc, a telehealth and virtual urgent care app dedicated to connecting users with medical professionals in an effective way. Following the significant increase in telehealth services that we utilized during the pandemic, we determined that we needed a more PACE-specific telehealth solution. We are partnering with JetDoc to develop a virtual care and remote patient monitoring platform specifically for a PACE program model. InnovAge and JetDoc have begun the design and development of a specific patient experience, focusing on early biometric features that will be included in the final product. We expect the technology will continue to allow InnoVAGE clinical and administrative staff to connect with participants and their caregivers for improved continuity of care. Regarding COVID, earlier this month, the White House mandated COVID-19 vaccines for all federal workers and employers with more than 100 employees. InnovAge continues to require, where legally permitted, that all InnovAge employees and participants receive the COVID-19 vaccine unless they are entitled to an accommodation based on religious belief, disability, or other legally protected reasons. We also continue to apply COVID-19 health and safety protocols in accordance with federal, state, and local public health authority guidance. This includes the requirement that appropriate PPE and symptom screening are in place for our participants and employees. I am also pleased to announce that we achieved our goal of having 90% of our employees vaccinated and 96% of our employees have at least one dose completed. As of last week, 86% of our participants have been vaccinated and we continue to target a 90% goal for our participants as well. For our centers, we continue to carefully monitor COVID trends in each of our markets and centers. Should we experience COVID pressures at our centers that would cause us to shut them down, partially or fully, we have the ability to do that. We also have the ability to reopen them in a phased approach as pressures are relieved. we remain deeply committed to participant safety and have the appropriate protocols necessary should any of our staff or participants test positive for COVID. Enrollment growth has continued to improve throughout the quarter and has returned to pre-COVID levels. Our participants continue to serve as ambassadors for the InnovAge brand. Referrals we receive from our own InnovAge participants have historically made up approximately 25% of census growth. In addition to participants, we continue to make significant strides regarding digital marketing efforts as we realign our marketing strategy to increase our focus on digital channels during the COVID-19 pandemic. From March 31st to the end of June, leads on our web qualifier grew more than 80% and referrals grew nearly 60%. I now want to discuss new additions to our team, employee turnover, and staffing, as we have received a number of questions about this topic. As we announced in today's earnings release, we are continuing to build out our leadership team with the addition of three key positions. Nicole D'Amato joined the company as Chief Legal Officer and Corporate Secretary. She oversees legal, government affairs, information security, and compliance. Nicole brings public company experience in of age, most recently as Senior Vice President and Chief Intellectual Property Counsel at McAndrews and Forbes, and operating a company, acquiring, divesting, and executing strategic long-term management, of diverse public and private companies ranging from cosmetics to pharmaceuticals. Emily Tansey joined the company as our new Chief People Officer. Emily spent more than 13 years with CVS Health. While there, she led multiple organizational design and change management initiatives, including transitioning employees to work from home during COVID-19. Olivia Patton joins InnovAge as our new Chief Compliance Officer. She will lead regulatory internal audit, the monitoring of policies and procedures, and company-related staff training programs. Olivia brings a depth of leadership experience in healthcare compliance, including developing training for CMS and Medicare policies, and was most recently the Corporate Compliance Officer for United Healthcare in Phoenix, Arizona. As of the end of our fiscal year, ended June 30th, 2021, we had approximately 1,800 employees excluding contractors. Approximately 1,200 of those employees are clinical professionals and interact with our participants on a regular basis. It is no surprise that managing turnover and retention is challenging for all healthcare organizations due to the limited supply of workers and the competitive environment in which we operate. That being said, we continue to address staffing needs of the business by proactively utilizing strategies to minimize the impact on our business and to sourcing talent that varies by location and position. We utilize recruitment process outsourcing alongside our internal recruiting team and utilize locum tenens and temporary help to fill positions on an interim basis. When included in our total employee count, contracted and temporary labor accounts for less than 10% of the overall total workforce company-wide. Regarding retention, our operating leaders work with their HR counterparts to foster a work environment that is rewarding both personally and professionally. We believe we have a unique culture at InnovAge, and for the fourth year in a row, InnovAge has been recertified as a great place to work. We have a company culture that honors our participants and staff as individuals and as important contributors to InnovAge as a whole. Our team delivers care and supports each other in a positive work environment. I'm extremely proud to work alongside such a capable and committed team in elevating senior care in all of our markets. I will now provide a brief update on the reimbursement and regulatory environment. We received an aggregate rate increase of approximately 5% across Colorado, Pennsylvania, and Virginia that became effective on July 1st of this year. We are still working with the state of New Mexico on finalizing our rates in that market and negotiations with California will not start until the fall for a January 1st, 2022 effective date. Barb will provide some additional detail on our rate increases, but I will highlight that we have received a mid single digit rate increase from the state of Colorado specifically, which is significant given the recent rate decrease we received last year due to the COVID pandemic. Regarding the regulatory environment, we continue to see positive federal and state legislative activity at levels we have not seen in recent memory. This is a very encouraging sign for PACE, as interest in the program is at an all-time high. Due to the increased legislative activity and the state interest in PACE, InnovAge became a member of the National PACE Association, or NPA, as well as the Leading Age Association. These two organizations are focused on furthering the interest of participants, advancing PACE, and aging-related services nationally at the state and local levels. We view our memberships with these two organizations as key additions to our overall legislative efforts when combined with our existing American Health Association Insurance Plans, or AHIP, and the National Committee for Quality Assurance, the NCQA memberships. In addition, we are members of several state associations, as PACE is a community-focused program, and we will continue to join local organizations as we grow. With new states looking to expand PACE, we are actively monitoring states and local interest in this program. To summarize current federal legislative activity, the pending $3.5 trillion budget reconciliation package could provide additional funding for PACE providers through home and community-based services and beneficial policy changes that would increase access to PACE. N of H has been actively advocating for HCBS funding levels to stay at the $400 billion level set forth in the resolution and for policy provisions, such as those set forth in the PACE Plus Act to be included in the final budget. CMS continues to put its leadership in place under the Biden administration. They have publicly announced that they expect to unwind many of the current demonstration projects operating out of the Center for Medicare and Medicaid Innovation, or CMMI. and will be looking to launch three to four pilots that fit within the administration's mission of health access and equality. Should CMMI select a PACE program for one of their pilots, we believe we will be well-positioned to participate in the program as we continue to discuss potential opportunities with potential collaborators. The American Rescue Plan Act provides additional funding to states that are considering adding PACE, including a 10% increase to the state federal match to Medicaid for home and community-based services, as well as the PACE program. We do not expect any new programs to be presented until the fall of the earliest, but we are closely watching the plan New York has proposed with interest, as they are planning a pilot program that would expand PACE to Medicare-only beneficiaries in the state for a fee. Regarding state legislation, pending California Assembly Bill 540 requires PACE participants to be exempt from mandatory enrollment into Medi-Cal managed care plans. It also requires that PACE is presented as an option during Medi-Cal enrollment periods. This bill is passed the Health Committee and has been referred to appropriations. California Assembly Bill 523 makes the flexibilities that were allowed during COVID to become permanent. These include telehealth, verbal enrollment agreements, and for adult day healthcare services to be provided in the home. In Michigan, pending Senate Bill 203 provides for the establishment of a new PACE program in a geographic area that is already being served by an existing PACE organization, pending the demonstration that an unmet need exists in that area, among other requirements. This bill was heard before the Health Committee in April and is pending committee vote. Florida House Bill 905 provides the agency for healthcare administration with additional authority to manage the PACE program. This bill was signed into law by Governor Ron DeSantis on June 21, 2021. I will now provide a brief update on the status of our audits in Sacramento and Colorado. As a reminder, given the nature of our business and the participants we serve, audits are a regular occurrence in our industry, including financial and Medicare Part D audits. We have and continue to work collaboratively with regulators as we seek to constantly improve our processes and outcomes to better serve our participants and their families. In early May, the Centers for Medicare and Medicaid Services began a routine scheduled audit of our Sacramento Center. CMS completed their audit field work on May 21st and requested additional information, which we supplied promptly. This past Friday, September 17th, we were notified that CMS has determined to freeze new enrollments at our Sacramento Center based on deficiencies detected in the audit. The deficiencies relate to failures to provide coverage services, provide accessible and adequate services, manage participants' medical situations, and oversee use of specialists, among others. The freeze will remain in effect until we correct these deficiencies and we are working on developing a corrective action plan to submit to CMS. In addition, we have a right to provide a rebuttal and request a hearing. At this time, given how recent the notice is, we are assessing options and are unable to estimate the duration of the freeze or the final outcome of this process. This freeze is limited to our Sacramento Center and does not extend to our San Bernardino Center in California. For context, There were less than 200 participants at Sacramento as of the beginning of this month. We are committed to quality improvement and comprehensive care coordination at each of our centers. The PACE program in Colorado has been the subject of three audits over the last several months conducted by the state and CMS. The state completed the onsite audit work on July 22nd, and we received preliminary findings at that time. CMS completed their audit work in Colorado on July 8th. We anticipate receiving their report in early 2022. We also expect that the state will issue their report around the same time for consistency purposes. In Colorado, we have not received any direction from CMS or the state of Colorado to freeze or otherwise curtail our program. And we have continued to operate our business in a consistent manner throughout the entire audit process. In addition, there have been no immediate corrective actions identified in the preliminary findings or to date. We believe the audit process is important to the integrity of the program, and each audit we undergo is an opportunity for us to improve the PACE program, improve our services, and ultimately the outcome of our participants' These audits will continue to make our program better over the long term. Before I turn the call over to Barb, I would like to highlight the certification from the National Committee for Quality Assurance of 14 of our centers as patient-centered medical homes. We have chosen to pursue this certification to demonstrate our ongoing commitment to quality improvement and comprehensive care coordination. I want to thank our entire team at InnovAge for their hard work, tireless effort, and dedication to our participants. Now I will turn the call over to Barb to review our financial performance in more detail and provide our outlook for 2022. Barb?