Compliance And Scarcity Define The Next Wave Of Home-Based Care Dealmaking

TL;DR

Prime Big Deal Days · Oct 6–7Offer from Amazon

Get workout gear delivered free — and shop member deals

• Fast, free delivery on millions of items
• Access to Prime Big Deal Days deals on October 6–7
• Prime Video, Amazon Music and more included

Start your free Prime trial →Free trial for eligible customers · Cancel anytime

As an affiliate, we earn on qualifying purchases.Hide

Home-based care dealmaking is becoming more selective, with buyers placing greater weight on compliance, care quality and financial performance. Industry experts say a Medicare enrollment moratorium may make established providers more attractive, while interest rates and economic uncertainty have cooled activity. A proposed 2.4% Medicare home health payment increase could add near-term predictability, but the deal market has not returned to its 2021 peak.

Home-based care dealmaking is entering a more selective phase, with buyers favoring providers that can show strong compliance, sound finances and quality care, according to industry experts interviewed by Home Health Care News. A Medicare enrollment moratorium may also make established agencies more attractive acquisition targets, even as economic conditions have slowed some transactions.

Buyers have not abandoned the sector, but the criteria for a deal have changed. Cory Mertz, co-founder and managing partner of Mertz Taggart, told Home Health Care News that companies with clean records and accurate accounting can still command premium values. Providers with average or weaker performance, he said, are having a harder time finding buyers. Industry participants also describe current transactions as stronger on profitability and care quality than deals made during the earlier boom.

Financing is one reason the market looks different from 2021. Les Levinson, a partner and co-chair of Robinson+Cole’s transactional health law group, said low interest rates then allowed private equity firms and other purchasers to finance deals with substantial debt. Buyers now need to commit more equity, increasing the capital required for acquisitions and encouraging greater selectivity. Levinson said the first and second fiscal quarters of 2026 performed below expectations, citing interest rates and global disruptions.

At the same time, buyers remain interested in home-based care. Jason Growe, founder and chief development officer of LiveWell Partners, said investors are drawn to the sector partly because care delivered at home can cost less and is preferred by many patients. An August report by The Braff Group said home-based care deal activity was gaining momentum and suggested that activity could carry into 2027. That is a forecast, not a guarantee of rising transaction volume.

Compliance Is Becoming a Deal Filter

The shift changes which providers are best positioned to sell. Audit and clawback concerns can make a buyer scrutinize records, billing practices and oversight before agreeing on a price. Levinson said compliance can preserve value, increase it, delay a transaction or cause a deal to fall apart. Providers that can answer diligence questions clearly may give purchasers more confidence than those unable to document their practices.

The enrollment moratorium adds a supply constraint to that scrutiny. Levinson said restrictions on new Medicare enrollment could make eligible existing agencies more appealing because buyers cannot simply rely on newly enrolled entrants. The effect could benefit established operators that meet the relevant standards, but it does not mean all existing agencies will be sale-ready or attract premium offers.

For providers, the practical stakes include access to capital and the ability to complete a sale on acceptable terms. For buyers, stronger diligence may reduce exposure to regulatory and financial problems after closing. The result is a market where quality and documentation may matter as much as geographic reach or growth plans.

From 2021 Financing to Selective Deals

The current market follows a period of unusually active acquisitions. In 2021, low-cost borrowing and an aggressive acquisition climate supported deals financed heavily with debt, Levinson told Home Health Care News. Higher financing costs have since made buyers more cautious and capital-intensive transactions harder to pursue.

Recent developments point in different directions. Levinson described weaker-than-expected deal performance in the first two fiscal quarters of 2026, while The Braff Group’s August report identified improving momentum. Mertz also cited a proposed CMS rule that would increase aggregate Medicare home health payments by 2.4%. The proposal, released in July, could provide more clarity for planning in 2027, but it is not a final payment decision.

LiveWell’s recent activity offers an example of buyers continuing to pursue acquisitions while tightening diligence. The company acquired Michigan Community VNA Home Health and Hospice in July, its third deal in Michigan. Growe said LiveWell has increased its focus on compliance and due diligence over the past couple of years.

““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 Volume and Policy Effects Remain Unsettled

It is not yet clear whether the reported improvement in deal momentum will translate into a sustained increase in completed transactions. The Braff Group’s August report described potential growth, while Levinson cited weaker performance in the first two fiscal quarters of 2026. The available reporting does not provide a complete transaction count or a common baseline for comparing activity across those periods.

The longer-term impact of the Medicare enrollment moratorium is also uncertain. The source material does not specify its full scope, duration or how many prospective transactions may be affected. Nor is the proposed 2.4% payment increase final; CMS could revise the policy before setting 2027 rates. It remains unclear how changing rates, state Medicaid programs and buyer preferences across regions will affect individual provider valuations.

Watch Rates, Rules and Buyer Activity

Market participants will be watching for CMS’s final decision on the proposed home health payment rule and for further clarity on Medicare enrollment restrictions. Those policy developments could affect forecasts for provider revenue and the pool of eligible acquisition targets.

Buyers are also expected to continue evaluating providers’ compliance records, finances and care quality as they weigh acquisitions. Growe predicted that the deal pipeline could accelerate over the next two to three years, while Mertz said demand has also increased for Medicaid-reimbursed personal care and private duty nursing. Whether that interest produces a broad rise in completed deals will depend on financing conditions, policy decisions and the quality of available providers.

Key Questions

Why are home-based care buyers becoming more selective?

Higher financing costs mean buyers need to commit more equity than during the low-rate acquisition period around 2021. Industry experts also cite audit, clawback and compliance risks, making financial records and care quality central to diligence.

How could the Medicare enrollment moratorium affect acquisitions?

Les Levinson said limits on new Medicare enrollment may make established agencies that meet applicable standards more attractive, since buyers may have fewer options to acquire newly enrolled businesses. The full effect on deal volume and valuations is not yet clear.

Has home-based care M&A returned to its 2021 peak?

No. The experts quoted by Home Health Care News described continued investor interest and signs of improving momentum, but said the market has not returned to the dealmaking frenzy of about five years ago.

Is the proposed 2.4% Medicare payment increase final?

No. CMS proposed a 2.4% aggregate increase to home health payments in July. The proposal could change before the agency makes a final decision for 2027.

Source: rss