Lawmakers Question Modivcare’s $750m Transportation Contract After Bankruptcy

Maine lawmakers have recently pushed the state’s Department of Health and Human Services (DHHS) to reconsider its 10-year, $750 million contract with Modivcare.

Modivcare, a provider of personal home care, non-emergency medical transportation and in-home monitoring solutions, announced in August that it filed for bankruptcy. Soon after, Maine lawmakers spoke out against the company’s non-emergency transportation (NET) contract with their state. The company currently contracts with Maine to provide these services across much of the state. 

“Modivcare is bankrupt, they’re being delisted by Nasdaq and local transportation providers are concerned that they won’t even be paid for rides they’ve already provided,” state Sen. Mike Tipping, D–Orono, said in an August statement. “Let’s take a moment to reconsider dismantling our local non-profit transportation infrastructure and handing them control over the lives of so many vulnerable Mainers.”

On Wednesday, politicians directly called for the state to reconsider the contract, according to News Center Maine, an NBC affiliate. 

“It was a very large contract, and for that contractor to fail, it’s failing all the people in Maine who are using that service,” state Rep. Laurie Osher, D–Orono, said, according to the outlet.

“The administration needs to change course on this policy,” state Sen. Joe Baldacci, D–Bangor, reportedly said.

Modivcare’s service lines, including its non-emergency transportation services, will “continue to operate in the ordinary course,” the company told Home Health Care News in a statement. 

“Modivcare is committed to ensuring that individuals throughout Maine have access to safe and timely rides to medical appointments and services,” the company stated. “Modivcare remains dedicated to working alongside state leaders, healthcare providers and community partners to continue providing quality transportation services across the state.”

DHHS told HHCN that the department was monitoring Modivcare’s bankruptcy filing.

“The department is in regular contact with Modivcare regarding their Chapter 11 bankruptcy filing and is actively monitoring to ensure continuity of NET services for MaineCare members,” Lindsay Hammes, a spokesperson for Maine DHHS, told HHCN in an email. “We understand the importance of these transportation services and our priority is to ensure that MaineCare members continue to get to their appointments without disruption and transporters are appropriately paid.”

Modivcare’s contract with Maine has been disputed in the past.

In 2023, Penquis Community Action Agency (Penquis) and Waldo Community Action Partners (Waldo CAP), nonprofit community action agencies that provide transportation as well as other services, filed an appeal of the state’s decision to award Modivcare the non-emergency medical transportation contract. In 2024, the state rejected the appeal. 

“We held a strong conviction that fundamental errors in the review and scoring of the [request for proposal] RFP rendered the award irredeemably flawed,” Penquis said in a 2024 statement.

“This decision is likely to impact the availability of other transportation services for struggling Mainers across our state,” the statement continued. “It also goes directly against the intent of the program as being delivered through eight distinct regions to acknowledge the unique variances of each region, and will have a very real economic impact, with almost $1 billion leaving our state and going to a for-profit entity. In addition, for Penquis, Waldo CAP, and KVCAP, the job loss would be significant and displace dedicated volunteer drivers, many of who have been driving for us for decades.”

Penquis and Waldo CAP were granted a stay of their NET services contract, allowing the companies to continue to provide services to Medicaid members through the end of 2024.

Penquis currently provides non-emergency transportation services in four Maine counties. Midcoast Connector provides services in four counties and several municipalities. Modivcare serves the rest of the state.  

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