Modivcare Emerges From Bankruptcy, Sheds $1.1B Debt for Tech-Fueled Future

DENVER, CO – December 29, 2025 – Modivcare Inc., a major provider of supportive care services, announced today it has successfully completed its financial restructuring and emerged from Chapter 11 protection, marking a pivotal turn for the healthcare technology company. The move effectively wipes away over 85% of its funded debt, equivalent to $1.1 billion, and repositions the company with a stronger balance sheet and a fresh injection of $100 million in new capital.

Now a privately-held entity owned by a group of its former creditors, Modivcare is signaling a strategic shift away from managing financial distress and toward aggressive investment and growth. Throughout the four-month restructuring process, the company maintained its full suite of services—including non-emergency medical transportation (NEMT), personal care, and remote patient monitoring—without interruption to its millions of members and health plan partners.

“This marks Day One of a stronger Modivcare,” said Heath Sampson, Chief Executive Officer and President of Modivcare. “We took deliberate action to strengthen our financial foundation so we could focus fully on what matters most: delivering reliable access to care at scale and investing in the capabilities our clients need for the future. We emerge with greater stability, a clear strategy and the ability to invest more aggressively in technology, analytics and service excellence.”

The Road to Restructuring

Modivcare’s journey into Chapter 11, filed on August 20, 2025, was the culmination of mounting financial pressures. The company, which reported $2.79 billion in revenue in 2024, was struggling under the weight of a roughly $1.4 billion debt load, much of it accumulated through an acquisition-driven growth strategy. Despite its significant revenue, it posted a net loss of $201.3 million in 2024 and saw its financial situation worsen in early 2025.

By the first quarter of 2025, revenues had declined nearly 5% year-over-year, and the company reported a net loss of $50.4 million with a negative free cash flow of $86.2 million. The root causes were multifaceted. Rising labor and transportation costs began to outpace stagnant Medicaid reimbursement rates, squeezing margins in its core NEMT business. Simultaneously, climbing interest rates made its floating-rate debt increasingly expensive to service.

Regulatory changes, including shifts in Medicare Advantage supplemental benefits and broader cuts to Medicaid funding, further pressured revenues. This financial instability created a challenging environment where the company faced both intensified competition and concerns from its own partners about its long-term viability, leading to contract attrition and weaker volumes across its business segments.

A Swift Financial Overhaul

The restructuring was executed with remarkable speed, concluding just over four months after the initial filing. The confirmed Plan of Reorganization, approved by the U.S. Bankruptcy Court for the Southern District of Texas, centered on a debt-for-equity swap. Creditors holding the company’s first-lien debt exchanged it for 98% of the equity in the newly reorganized, private Modivcare. This move not only deleveraged the company but also aligned its new owners with its long-term success.

Transitioning to private ownership under a group of seasoned investors frees Modivcare from the short-term pressures of public market scrutiny and quarterly earnings reports. This allows leadership to focus on a long-term growth strategy. The company’s new board will include directors representing the new ownership group, bringing significant financial and strategic expertise to help guide its future.

“We have always believed in Modivcare’s leadership position,” a representative of the investor group stated. “This restructuring strengthens the Company’s ability to invest at scale in the technology, data and operational capabilities that matter most to clients. Modivcare is well positioned to extend its leadership and continue delivering essential care in more efficient and innovative ways.”

Doubling Down on Technology and Supportive Care

With its financial house in order, Modivcare is now poised to execute on its core mission of addressing the social determinants of health through technology. The company’s leadership has emphasized that the new capital will fuel aggressive investments in its platforms for NEMT, personal care services (PCS), and remote patient monitoring (RPM).

This strategic pivot comes as the markets for these services are experiencing explosive growth. The NEMT market is projected to surpass $15 billion by 2029, driven by an aging population and the increasing need for reliable transportation to medical appointments. The RPM market is expanding even more rapidly, with some estimates projecting it to exceed $50 billion by 2030 as healthcare systems seek to manage chronic diseases and reduce hospitalizations through continuous, at-home monitoring.

Modivcare plans to leverage artificial intelligence and advanced analytics to enhance route optimization in its transportation network and to provide predictive insights in its patient monitoring services. The goal is to create a more integrated “high-tech, high-touch” ecosystem that combines data-driven efficiency with compassionate member engagement, ultimately lowering costs for health plans and improving outcomes for patients.

A Revitalized Competitor in a Dynamic Market

The successful restructuring transforms Modivcare from a financially encumbered incumbent into a revitalized and formidable competitor. Free from its crushing debt, the company can now compete on innovation and service quality rather than focusing on survival. This new financial flexibility will allow it to invest in retaining and attracting talent, upgrading its technological infrastructure, and potentially pursuing strategic partnerships or acquisitions from a position of strength.

In the burgeoning NEMT and RPM sectors, where technology-first startups are challenging traditional models, Modivcare’s ability to combine its vast scale with renewed agility will be critical. The company provides millions of rides and monitors thousands of patients annually, giving it a massive operational footprint and a wealth of data that can be leveraged for future innovation.

The completion of its financial overhaul is not an end but a new beginning. The focus for Modivcare now shifts from the balance sheet to the marketplace, where it must prove that its newfound stability can translate into sustained growth and market leadership in the essential work of connecting vulnerable populations to care.