InnovAge Holding Corp. (NASDAQ:INNV) Q2 2023 Earnings Call Transcript

We have a lot of experience with this and we think now is the time to re-engage and we’ll be moving on that very quickly.

Madeline Mollman: Great. Thank you. And then in terms of the capacity expansion, I know you’ve talked a lot about the resuming enrollment in Colorado, but you also have significant capacity in centers that were not under sanction. And I was just wondering was that an intentional choice to focus on your regulatory resolutions as opposed to enrollment in those centers. Just wondering about the, sort of underutilized capacity there and how you expect to grow that and how that will impact margins as well?

Barbara Gutierrez: Hey, Madeline, it’s Barb. I’ll take a crack at that. So, our capacity is not just in Colorado market. We have capacity in many of our centers, most of our centers. And this is very similar to what we said when we initially went public. We build our centers to really €“ to be able to serve a large number of PACE eligibles in that market. So, for example, in San Bernardino, a center not under sanction, it’s a very large center that we grow. We’re growing very nicely there, but we still have a lot of capacity. So, it’s not just in the sanctioned markets in Colorado, however, because we have lost about 20% of our census over the time we’ve been under sanction, we have a little bit more capacity than we did before sanction, but we have a lot of €“ most of our centers have some capacity and that’s intentional.

Madeline Mollman: Got it. Thank you. And then one more question on Sacramento. Is there anything about the state review in California that’s different than Colorado’s or just wondering about the timeline there? And if they’ve given you any updates on the process or anything like that?

Patrick Blair: The first thing that I would say is, CMS in the State of California and the Sacramento have worked very closely together throughout the audit period. And as, you know, we were lifted from sanctions by CMS. We haven’t received any incremental requests or clarifying questions from the state, which leads us to believe that we should be hearing any day now. They’ve been super constructive partners and we’re being as patient as possible. It’s our understanding that they have seen some significant demands across the agency that could be contributing to the timing on this, but recall, we had very good audit results with CMS and we feel strongly that we’ve made all the systematic improvements in Sacramento and should be released, but we do from state.

Madeline Mollman: Great. Thanks so much.

Operator: Thank you. Ladies and gentlemen, that concludes the Q&A session. I would now like to turn the call back to Patrick for closing remarks.

Patrick Blair: Well, I’ll just say thank you again for everyone who has taken the time to listen into the call and look forward to spending time with you in another quarter. Thank you so much.

Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.