Modivcare Inc., a healthcare services company that uses technology to provide integrated supportive care solutions to improve health outcomes, has made a strategic decision to strengthen its financial position while ensuring continued access to care and improving service quality for its clients and members across the country. The company has voluntarily filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas to carry out a comprehensive restructuring plan supported by the majority of its key stakeholders. This move is intended to build a more resilient and sustainable business model that supports future growth, and continues to serve members through its non-emergency medical transportation, personal care services, and remote patient monitoring offerings.
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Heath Sampson, Chief Executive Officer and President of Modivcare, said, “Modivcare is at the heart of the preventive healthcare system. This recapitalization strengthens our financial position and allows Modivcare to speed up our investments in innovation by combining technology and data with personal member engagement. As the connection point for care, our connected platform improves access, quality, and cost for payors, providers, and facilities, and positions us to lead the way in coordinated care.”
More than 90 percent of First Lien Lenders and over 70 percent of Second Lien Lenders have signed a Restructuring Support Agreement with Modivcare. These lenders are committed to supporting the company throughout the restructuring and will provide $100 million in debtor-in-possession financing to keep the company running smoothly during the bankruptcy process. Once this financing is secured, Modivcare will have more than $100 million in liquidity. The restructuring will reduce the company’s funded debt by about $1.1 billion, which is more than 85 percent of its current debt, lower annual interest costs, and transfer ownership to experienced investors who are dedicated to the company’s future success.
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All service lines will keep operating without disruption, with no expected impact on access to care. Modivcare plans to finish the restructuring and exit Chapter 11 early in the fourth quarter of 2025 while staying focused on operational excellence. The company has filed standard motions to ensure it can fulfill its obligations to clients, vendors, including transportation providers, and employees by continuing to pay wages and benefits without interruption.
This restructuring initiative is aimed at securing Modivcare’s long-term stability and helping it better serve its members while maintaining its leadership position in the healthcare support services market.
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