The issue
Overwhelmed with the ongoing migrant crisis, New York City declared a state of emergency and made the eyebrow-raising move of awarding a $432 million, no-bid contract to a for-profit healthcare company, DocGo, in part to help the city shepherd migrants upstate. The company, based in New York City, previously contracted with the city to provide COVID-19 testing, vaccinations and homeless health services under the umbrella of Ambulnz, a DocGo subsidiary.
Despite a lack of track record with immigration services, DocGo’s arrangement with the city requires the company to cover a variety of asylum-seekers' needs, including transportation, lodging, case management and medical care.
Since early May DocGo has provided shelter and services to 4,000 people in 28 hotels, according to city officials. Reports surfaced in late July that migrants had been misled with promises about finding work and mistreated once they arrived at hotels upstate.
In addition to the no-bid contract awarded by the New York City Department of Housing Preservation and Development, New York City Health + Hospitals system this summer extended an existing migrant services contract with DocGo for $311 million.
If the company manages to reap the maximum value of the two contracts—more than $740 million—it would dramatically outpace the $440 million in revenue the company generated in 2022. The contracts represent about 6% of the $12 billion the city expects it will cost to manage the migrant crisis over the next two years.
The players
DocGo President and Chief Operating Officer Lee Bienstock joined the company in 2022 after 10 years at Google, where he most recently served as the company’s global head of enterprise partnerships for devices and services. He also held roles in Google Search, YouTube and Fiber. After becoming the runner-up in the fifth season of “The Apprentice,” he went to work for Donald Trump, serving as associate vice president of the Trump Organization from 2005 to 2007.
DocGo CEO Anthony Capone has been with the company since 2017 in a handful of roles, including as chief technology officer and chief product officer.
Andre Oberholzer served as DocGo’s chief financial officer and was promoted to treasurer and executive vice president of capital markets and strategy in January. He collected some $1.3 million selling shares at an average price of $10.26 on Wednesday—the largest insider sale at DocGo over the past year, according to Securities and Exchange Commission records.
New York Mayor Eric Adams (D) has visibly supported the company, attending DocGo’s June investor conference at Nasdaq’s offices in Times Square. “If you don’t have docs on the go, then you have a retro thinking of healthcare,” Adams told investors at the conference.
DocGo’s contract went into effect May 5, but the office of New York City Comptroller Brad Lander (D) confirmed to Crain’s New York Business that the document was only received for review on Wednesday—a noteworthy delay as a review by the comptroller is the final step in city contract approvals. Records show that the contract’s prime vendor is listed as Rapid Reliable Testing NY, which filings with the Securities and Exchange Commission show is a fully owned subsidiary of DocGo.
On its website, DocGo describes itself as “one of the largest medical transportation companies in both the U.S. and the U.K.” Globally, the company says it has more than 4,500 full-time medically trained field staff, along with a fleet of over 1,000 ambulances and other vehicles. DocGo claims it transports more than 600,000 patients each year, along with offering mobile health services to bring medical care to patients outside of traditional hospital or clinic settings.
The uproar
Recent scrutiny of DocGo’s management of migrants has yielded allegations of mistreatment and calls for greater oversight of the company’s handling from local and state officials. Multiple migrants told the New York Times that they were misled about help finding work and the conditions they’d experience upstate. Those bused into the state Capital Region have reported issues receiving healthcare, concerns about food and trouble accessing local transportation, according to the Albany Times Union.
Local authorities say DocGo has not consistently provided key information about arriving migrants that would help them access assistance programs and pursue asylum cases.
Amid the slew of complaints, New York Gov. Kathy Hochul (D) told reporters that she is “not satisfied” with the situation. "We are doing a review and working with the city to make sure that [DocGo] is meeting all of their contractual obligations because I'm not convinced that that is happening in every area," Hochul said on Aug. 10. “They are being paid a lot of money from the city, and we want to work with the city to ensure that all requirements are being met.”
Company history
DocGo, which launched in 2015 and is headquartered in New York City, says it has worked with a variety of healthcare networks, governments across 26 states and major corporations including Disney, Amazon, Uber and Dollar General. COVID-19 testing made up roughly a third of the company’s $318.7 revenue in 2021.
The company was valued at $889 million as of Thursday. At the end of June, the company had generated more than $451 million in revenue over the previous 12 months, according to Pitchbook.
DocGo went public after it closed a merger with Motion Acquisition, a special purpose acquisition company, also known as a SPAC, resulting in the combined company trading on the Nasdaq under the ticker symbol "DCGO" beginning Nov. 5, 2021. Since then, the company has experienced rapid growth that hasn’t let up. DocGo Chief Financial Officer Norm Rosenberg celebrated on an August earnings call that the company set a revenue record in its second quarter, generating $125.5 million—an 11% increase compared to the first quarter of the year.
On the earnings call, Bienstock referred to the city contract, which hasn’t been publicly released, as a “mobility health contract.” He added that the company landed the contract after it “successfully worked with the city across numerous contracts, spanning multiple years, building our track record and the city’s trust.” Company officials say they believe DocGo is positioned to earn the contract’s full amount and expect the contract will be extended beyond its March 2024 end date.
What’s next
DocGo has maintained that it is meeting its contractual requirements. The city comptroller and the state's Office of Temporary and Disability Assistance are working to review the contract and the company's handling of its responsibilities.
The debacle’s long-term impact on the company remains unclear, with shares opening at $8.90 Monday—6.6% below the $9.53 the price at the start of the year.
Perhaps in an attempt to do some damage control, DocGo is looking to hire a director of government relations and relationship management. The position would pay up to $150,000 annually with responsibilities that include “identify and develop processes and tools to expand our government reach and success.”
