: CEO who built new model for senior care resigns amid regulatory scrutiny

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The CEO who played a significant role in the dramatic expansion of government-funded home and community-based care for frail seniors has stepped down from the company she built as regulatory concerns continue to mount. 

Maureen Hewitt resigned as chief executive of InnovAge Holding
INNV,
+0.20%

effective January 1, the Denver-based company announced Monday. InnovAge is the largest provider in the Program of All-Inclusive Care for the Elderly (PACE), a Medicare- and Medicaid-funded service designed to meet all the healthcare needs of frail seniors while keeping them out of nursing homes.

The leadership shakeup comes amid regulatory setbacks that threaten to curtail InnovAge’s rapid growth. Federal and state regulators in late December suspended enrollment of new Medicare and Medicaid beneficiaries at the company’s Colorado locations, saying InnovAge had failed to provide medically necessary services to PACE participants in the state. In Colorado, InnovAge failed to schedule or delayed scheduling services for patients and failed to follow up on specialists’ diagnoses and recommendations, among other issues, the Centers for Medicare and Medicaid Services said in a December letter to Hewitt. After the enrollment freeze, InnovAge withdrew its fiscal year 2022 guidance, and the company’s stock has since dropped roughly 40%.

The regulators’ findings in Colorado echo concerns raised by former InnovAge employees and patient advocates and reported by MarketWatch in November. InnovAge participants, which include some of the most fragile and medically complex seniors, often face long waits for medical appointments, difficulty accessing specialist care, and prescription delivery problems, former employees and others familiar with the company told MarketWatch.

The day after the MarketWatch article was published, InnovAge announced the appointment of Patrick Blair, a former home health company executive, as president. Blair has now succeeded Hewitt, becoming CEO and president, the company announced Monday. Hewitt is also stepping off of InnovAge’s board.

Regulatory issues come as industry groups push to expand home-based services.

Hewitt, who became InnovAge’s CEO in 2006, played a pivotal role in transforming InnovAge from a humble nonprofit organization into a for-profit corporation that had a Wall Street growth story. With private equity backing, InnovAge has rapidly increased its enrollment in recent years and has a high-profile board of directors that includes two former top Medicare officials. 

But the company’s March 2021 initial public offering was quickly followed by regulatory issues, including a September enrollment suspension at InnovAge’s Sacramento location, based on problems similar to those cited by regulators in Colorado. Because Medicare and Medicaid pay PACE providers fixed monthly rates to cover participants’ healthcare needs, providers can profit by skimping on patient care, critics of for-profit PACE say. InnovAge says its approach improves care quality while reducing overuse of high-cost care settings.

InnovAge’s regulatory troubles come as some lawmakers and industry groups are pushing to further expand home and community-based services such as PACE that can help keep seniors out of nursing homes. More than 144,000 nursing home residents and staff members have died of COVID-19.

InnovAge is working with CMS and the Colorado Department of Health Care Policy and Financing to respond to the enrollment suspension and is evaluating options regarding its right to appeal the sanctions, the company said in late December.

“COVID has presented unique challenges to all providers, including PACE,” Blair said in a statement. “Still, it is a great care model. I know we can address the issues presented and return to a very constructive partnership with the California and Colorado programs.”

“I am very proud of what we accomplished at InnovAge,” Hewitt said in a statement. “I believe PACE is the best way to care for low-income seniors, and I know we have done a tremendous job for many thousands of participants and their families in the 15 years I have been privileged to lead the company.” 

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