TL;DR
Home-based care dealmaking is moving toward selective acquisitions of providers with strong compliance, care quality and financial records, according to industry experts cited by Home Health Care News. A Medicare enrollment moratorium may make established agencies more attractive, while a proposed 2.4% payment increase adds some visibility for 2027. The pace and scale of any recovery remain uncertain.
Home-based care buyers are increasingly favoring compliant providers with strong care quality and reliable financial records, as higher financing costs and a Medicare enrollment moratorium reshape dealmaking, industry experts told Home Health Care News. The shift could give established agencies an advantage, though experts do not say the current market has returned to the acquisition boom of about five years ago.
The market is more selective than it was in 2021, when low interest rates and inexpensive capital helped buyers, including private equity firms, finance acquisitions with substantial debt, said Les Levinson, a partner and co-chair of the transactional health law group at Robinson+Cole. Buyers now need to commit more equity, raising the cost of deals and encouraging them to choose targets more carefully. Levinson said macroeconomic conditions contributed to weaker-than-expected dealmaking in the first and second fiscal quarters of 2026.
Cory Mertz, co-founder and managing partner of Mertz Taggart, said buyers remain interested but are less willing to acquire average or below-average companies. Providers with accurate accounting, strong operations and clean compliance records can still command premium values, he said. Jason Growe, founder and chief development officer of LiveWell Partners, also described recent deals as stronger in profitability and care quality than some transactions made during the earlier boom.
An August report from The Braff Group said home-based care dealmaking was gaining momentum and could increase in volume, potentially carrying through 2027. That is a forecast, rather than a confirmed increase in completed transactions. The report’s outlook contrasts with the weaker first half of 2026 described by Levinson, and the available source does not provide a deal count or measurement window to quantify the change.
Compliance Shapes Who Can Sell
Compliance can affect whether a transaction proceeds and what a buyer is willing to pay. Levinson said regulatory compliance is a factor that can preserve value, increase it, delay a deal or cause one to fall apart. Buyers concerned about audits and repayment demands may scrutinize a provider’s records and practices before moving forward.
The Medicare enrollment moratorium may add another source of demand for existing providers that meet enrollment requirements. Levinson said limits on new enrollment could make established agencies more appealing acquisition targets. That effect does not mean every existing agency will attract a buyer: Mertz and the other experts described a market in which purchasers are applying greater selectivity to business quality and compliance.
Home-based care also draws investor interest because care at home can cost less than institutional settings and many patients prefer it, Growe said. His comments describe investors’ rationale, not a guarantee that every home-based care business will be less costly or produce better outcomes.
From Debt-Fueled Deals to Selectivity
In 2021, low interest rates and available capital supported a more aggressive acquisition environment in home-based care, according to Levinson. Financing conditions have since changed: buyers need to put more equity into transactions, making acquisitions more expensive and limiting how many deals some investors pursue.
CMS’s home health Medicare enrollment moratorium is intended to reduce fraud, Levinson said. He described an unintended market consequence: existing agencies that meet the moratorium’s standards may become more valuable because new providers cannot enroll during the restriction. The source does not specify the moratorium’s full duration or all enrollment criteria.
In July, CMS proposed an aggregate 2.4% increase in home health payments. Mertz said the proposal was more favorable than expected and gives companies greater visibility into 2027. It is a proposed rate change, not a finalized payment increase. Growe said LiveWell has increased its attention to compliance and due diligence over the past couple of years; the company acquired Michigan Community VNA Home Health and Hospice in July, its third deal in Michigan.
““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
Deal Recovery Remains Unsettled
The scale and timing of a possible dealmaking rebound are unclear. The Braff Group report points to possible momentum into 2027, while Levinson cited weak performance in the first two fiscal quarters of 2026. The source offers no transaction totals that would reconcile those assessments or establish a measurable rate of recovery.
CMS’s proposed 2.4% payment increase remains subject to the federal rulemaking process. The source does not establish whether the final rate will match the proposal. It also does not specify how long the Medicare enrollment moratorium will remain in place or how much it will change agency valuations.
Experts expect compliant companies to fare better, but individual outcomes will depend on factors such as finances, care quality, geography and buyer diligence. The source provides no market-wide valuation data or evidence that all established providers are eligible to transact.
Payment Rule and Deal Pipeline
CMS’s final home health payment rule for 2027 is a near-term milestone for providers and potential buyers. Mertz said the proposed rate offered more visibility for the next 12 months, until another proposed rule is issued. The final payment level and its effect on dealmaking are not yet known.
Growe predicted that deal pipeline activity could accelerate over the next two to three years. Buyers are also showing increased demand for Medicaid-reimbursed personal care and private duty nursing, Mertz said, noting that these programs are run by states. Whether that interest produces more completed transactions will depend on financing, regulatory conditions and the availability of providers that meet buyers’ standards.
Key Questions
What is changing in home-based care acquisitions?
Industry experts say buyers are pursuing deals more selectively and placing greater emphasis on compliance, care quality and reliable financial records.
How could the Medicare enrollment moratorium affect sellers?
According to Les Levinson, limiting new Medicare enrollment could make established agencies that meet the moratorium’s standards more attractive acquisition targets. The effect on individual company values is not quantified in the report.
Has home-based care dealmaking returned to its 2021 peak?
No. Jason Growe said activity may be picking up, but the industry has not reached the dealmaking frenzy of about five years ago. The report does not provide transaction counts to measure the gap.
Is the proposed 2.4% home health payment increase final?
No. CMS proposed a 2.4% aggregate increase in July; the source does not report a final rule or confirm the final payment change.
Source: rss
