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Home-based care dealmaking is moving away from the aggressive acquisition climate of 2021, with buyers placing more weight on compliance, financial records and care quality. Industry advisers say Medicare enrollment limits could make established agencies more attractive, while the timing and scale of a broader market rebound remain uncertain.
Home-based care dealmaking is entering a more selective phase, with buyers favoring providers that can demonstrate strong compliance, reliable financial records and quality care, industry experts told Home Health Care News. The shift comes as tighter financing and a Medicare enrollment moratorium change which agencies are available to acquire, though forecasts of a sustained rise in deals remain uncertain.
Buyers are still interested in the sector, but advisers say they are less willing to acquire companies with unresolved compliance or financial concerns. Cory Mertz, co-founder and managing partner of healthcare M&A adviser Mertz Taggart, said companies with clean records and accurate accounting can still command premium values. Average or weaker providers that sold during the previous dealmaking boom are finding it harder to transact now, he said.
The financing environment has changed since 2021, when low interest rates and inexpensive capital helped private equity firms and other buyers fund acquisitions with more debt. Les Levinson, a partner and co-chair of the transactional health law group at Robinson+Cole, said buyers now need to commit more equity, increasing the capital required for deals and encouraging more selective acquisition strategies. He said macroeconomic conditions weighed on performance in the first and second fiscal quarters of 2026, citing interest rates and global disruptions.
An August report from The Braff Group pointed to renewed momentum in home-based care transactions, with activity potentially increasing through 2027. Jason Growe, founder and chief development officer of LiveWell Partners, said investor interest reflects the potential to provide care at home at lower cost and patients’ preference for receiving care there. He said current transactions appear stronger in financial performance and care quality than some deals in the prior boom, but the market has not returned to that period’s peak pace.
The experts also pointed to CMS’s home health Medicare enrollment moratorium as a factor in deal supply. Because new agencies cannot enroll in the program under the moratorium, existing providers that meet applicable requirements may become more appealing acquisition targets. Levinson described that limited supply as an unintended consequence of the policy. The source report does not specify the moratorium’s full geographic or operational scope.
Compliance Now Shapes Deal Value
The shift changes what sellers may need to demonstrate before a transaction. Documented compliance, accurate accounts and timely, well-supported answers during due diligence can help buyers assess risk and maintain confidence in a deal. Unclear practices or unresolved questions can slow negotiations, reduce value or put a transaction at risk, Levinson said.
For buyers, acquiring a provider with a functioning Medicare enrollment can offer access to a constrained pool of agencies, but the opportunity does not remove regulatory exposure. The experts said the strongest prospects are those that meet requirements and can substantiate their operations. That makes operational quality and compliance central to deal screening, rather than secondary checks after interest has formed.
For patients and communities, deal activity can affect which local providers remain independent and who owns or operates services. The source does not report specific changes to patient access or care resulting from recent transactions, so those effects cannot be assumed. Still, the combination of limited agency supply and investor interest makes the market’s direction relevant to providers, workers, patients and referral partners.
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From 2021 Boom to Selective Buying
The current market contrasts with 2021’s low-rate environment, when buyers could use more debt to finance acquisitions. Levinson said that financing dynamic has since shifted, while Mertz described a gap between well-run companies that remain attractive and weaker businesses that are struggling to find buyers.
There are also potential policy and payment factors affecting expectations. CMS proposed a 2.4% aggregate increase in home health payments in its July proposed Medicare payment rule. Mertz said the proposal offered more certainty about 2027 payments than buyers had expected, while stressing that the next proposed rule could change the outlook. The figure is a proposal, not a finalized payment change.
LiveWell Partners has pursued acquisitions in the region, including its July purchase of Michigan Community VNA Home Health and Hospice, which the source describes as its third deal in Michigan. Growe said the company has increased its focus on compliance and due diligence over the past couple of years. His account illustrates how one buyer is approaching transactions; it does not establish a market-wide standard.
“There’s a lot of investor capital that is looking to be deployed, and home-based care is an attractive place to look.”
— Jason Growe, founder and chief development officer of LiveWell Partners
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Deal Rebound Still Uncertain
The scale and timing of any M&A rebound are not settled. The Braff Group’s August report said momentum could carry through 2027, while Growe forecast faster deal-pipeline activity over the next two to three years. Those are industry expectations, not confirmed transaction totals or guarantees.
The report does not provide deal counts, valuations, or a quantified comparison with prior years, and it does not identify how many agencies are eligible to transact under the Medicare enrollment moratorium. The final terms of CMS’s proposed payment rule are also unknown. Interest rates, economic conditions, state Medicaid policies and buyer financing decisions could affect activity.
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Payment Rule and Pipeline Watch
Market participants will be watching for CMS’s final home health payment rule and for evidence that deal activity is increasing beyond the forecasts cited by advisers. The July proposal points to a potential 2.4% aggregate payment increase, but its final provisions are not established in the source report.
In the near term, sellers are likely to face close scrutiny of financial statements, compliance systems and care quality as buyers weigh the cost and risk of acquisitions. Any change in the Medicare enrollment moratorium, financing conditions or state reimbursement programs could alter which providers attract interest. The number of completed deals and whether activity sustains through 2027 remain to be seen.
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Key Questions
What is changing in home-based care dealmaking?
Industry experts say buyers are becoming more selective and giving greater weight to compliance, financial records and care quality than during the 2021 acquisition boom.
Why could the Medicare enrollment moratorium affect acquisitions?
The report says new agencies cannot enroll in Medicare under the moratorium. That may make established providers that meet requirements more attractive to buyers, although the report does not quantify how many agencies are affected.
Are home-based care deals increasing?
An August report from The Braff Group described momentum that could continue through 2027, and one investor forecast faster pipeline activity over the next two to three years. The source provides no deal totals confirming a broad increase.
What payment change has CMS proposed?
In July, CMS proposed a 2.4% aggregate increase in home health payments. It is a proposed change; the source does not report a final rule.
What makes a provider more attractive to buyers?
The advisers cited clear compliance practices, accurate accounting, strong financial performance and quality care. They said buyers may become less confident when a seller cannot answer due-diligence questions clearly.
Source: rss
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