Maine’s highest court upholds $750M contract state awarded to Denver-based company
By Marie Weidmayer, Bangor Daily News Staff
A $750 million contract for transportation services will stay with an out-of-state company, Maine’s highest court ruled.
The Maine Department of Health and Human Services awarded a 10-year contract for non-emergency transportation services to Denver-based Modivcare Solutions, LLC in 2023. The contracts are to provide transportation for Medicaid patients who have no other ride to medical appointments.
A “competitive bidding process” ended with the contracts being awarded to Modivcare, and there was no reason to invalidate that decision, according to the opinion issued by the Maine Supreme Judicial Court.
For years before the contract change, Penquis Community Action Agency provided those transportation services for low-income residents in Kennebec, Penobscot, Piscataquis and Somerset counties. Penquis sued after the contract was awarded to Modivcare, saying the process was “fundamentally unfair.”
The state’s highest court heard the case in February, and issued the 17-page opinion Aug. 4. Five judges unanimously found there was no ground to invalidate the decision from DHHS.
“Simply put, there was scant evidence in the administrative record to support Penquis CAP’s claim of disparate treatment,” the opinion said.
The revenue from non-emergency transportation services helps Penquis fund other transportation services. The nonprofit has said it worries the entire state system could fail with all rides provided through one company.
The court also rejected a challenge from Waldo Community Action Partners over similar issues.
“Today’s decision brings clarity, and we will abide by the decision,” Penquis CEO Kara Hay said. “Our priority is continuity for MaineCare members and for the transportation partners who make these rides possible every day. We will work closely with the State, ModivCare, and community transportation partners through the transition and beyond to support reliable, high-quality transportation services across Maine.”
MaineCare members getting to appointments without disruption and making sure transportation providers are paid is the focus of DHHS, spokesperson Lindsay Hammes said. The department is glad the legal proceedings are complete, she said.
Modivcare did not immediately respond to requests for comment. The Office of the Maine Attorney General, which represented DHHS, said it has no comment.
Modivcare was supposed to start serving all 16 counties in July 2024, but the lawsuit paused that change. The supreme court lifted that pause, meaning Modivcare can start providing non-emergency transportation services in all counties on Jan. 1, 2027.
There will be changes to Penquis’ staffing and operations after the transition, but it is too early to say what those changes will be, the company said.
The contract award to Modivcare ended Penquis and Waldo CAP’s roles in transportation and eliminated a revenue stream. That revenue helped provide transportation services to people not on Medicaid to dialysis or cancer treatments, and to bring people who are housebound to the grocery store, according to previous reporting.
Penquis argued that it was entitled to records from DHHS requested under the Freedom of Access Act before the appeals hearing. The department said it did not have time to complete the request before the hearing because of the size and need to redact confidential information, according to the opinion.
Evidence is allowed to be presented at the hearing, but the law only entitles Penquis to whatever evidence it already has, the opinion said. The hearing did not need to be delayed to allow time to process the FOAA request.
Penquis also argued there were errors in the decision to validate the contracts with Modivcare.