TL;DR
Get workout gear delivered free with Prime
- Fast, free delivery on millions of items
- Prime Video, Amazon Music and more included
- Member-only deals all year
Home-based care M&A is becoming more selective, with compliant, well-run agencies commanding premium values while average providers struggle to sell, according to industry advisors. CMS Medicare enrollment moratoria and a proposed 2.4% payment increase are making existing agencies scarcer and more attractive, with deal momentum expected to build through 2027.
Home-based care mergers and acquisitions are entering a more selective phase in which compliant, clinically strong providers command premium prices while average-quality agencies struggle to sell, industry dealmakers told Home Health Care News. The shift follows a weaker-than-expected first half of 2026, but an August report from the Braff Group found dealmaking is regaining momentum that could carry through 2027.
Cory Mertz, co-founder and managing partner of the healthcare M&A advisory firm Mertz Taggart, said buyer appetite remains strong but purchasers have grown pickier amid heightened audit and clawback concerns. “If you have a squeaky-clean company, you’re doing everything right, the accounting is accurate; those tend to still command premium values,” Mertz said. “It’s the, for lack of a better term, average or below-average companies that had transacted in the past that just aren’t selling right now.”
The deal environment contrasts sharply with 2021, when low interest rates let private equity firms finance acquisitions heavily with debt, according to Les Levinson, partner and co-chair of the transactional health law group at Robinson+Cole. Buyers now must commit more equity, making deals more expensive and pushing firms to be more selective. Levinson said the first and second quarters of 2026 came in below expectations, largely due to macroeconomic conditions.
Two regulatory developments are reshaping the market. First, the CMS home health Medicare enrollment moratorium, designed to reduce Medicare fraud, prevents new companies from enrolling — making existing agencies scarcer and more enticing as acquisition targets. Second, CMS in July proposed a 2.4% aggregate payment increase for home health, which Mertz said gives buyers more certainty through 2027. Jason Growe, founder of LiveWell Partners, which acquired Michigan Community VNA Home Health and Hospice in July — its third Michigan deal — said his firm has intensified its compliance and due diligence focus in recent years.
The selective buyer environment creates a widening gap between high-quality and average providers. Companies with accurate accounting, clean audits and strong clinical outcomes can still attract premium valuations, while weaker operators that found buyers during the 2021 frenzy are now largely sitting on the sidelines, according to Mertz.
The CMS moratoria add a scarcity premium for established agencies. Because new providers cannot enroll in Medicare in affected markets, existing agencies that meet moratorium standards become more valuable acquisition targets, Levinson said. Regulatory compliance has become the single most deal-relevant factor: it can preserve value, derail a transaction, or lift it, depending on how confidently a seller can answer buyer questions.
Investor interest also remains durable. Growe noted that significant capital is seeking deployment, and home-based care is attractive because caring for patients at home costs less than facility-based settings, and patients generally prefer it. Mertz added that demand has grown for Medicaid-reimbursed personal care and private duty nursing, programs administered at the state level.
Top picks for "compliance scarcity define"
As an affiliate, we earn on qualifying purchases.
From 2021 Debt-Fueled Frenzy to Today
Five years ago, home-based care M&A was defined by cheap capital and aggressive acquisition activity. Levinson said low interest rates allowed private equity and other buyers to finance deals heavily with debt. As rates rose and global disruptions mounted, that dynamic reversed, cooling dealmaking and shrinking the pool of willing buyers.
Despite the soft first half of 2026, the Pittsburgh-based Braff Group’s August report found home-based care dealmaking gaining momentum, with the potential for spikes in deal volume through 2027. Growe agreed activity is on the upswing, though not at the peak levels of five years ago — but he said today’s deals are of higher quality in terms of both profit-and-loss performance and quality of care.
“There’s a lot of investor capital that is looking to be deployed, and home-based care is an attractive place to look. It is cheaper to care for someone in the home, and the patient and person would rather receive their care in the home.”
— Jason Growe, founder and chief development officer, LiveWell Partners
Open Questions on Rates, Rules and Buyers
Several factors remain unsettled. The CMS payment rule is still a proposal, and the final rule’s terms and timing have not been confirmed. Levinson cautioned that interest rates and global disruptions had a stronger chilling effect on dealmaking than many in the industry expected, and macroeconomic conditions could still weaken the projected momentum.
The source reporting also cuts off mid-sentence regarding how buyer geographic strategies are set to change, leaving those details unclear. Whether the Braff Group’s projection of a deal volume spike through 2027 materializes depends on conditions that advisors themselves describe as uncertain.
Dealmaking Outlook Through 2027
Growe predicted the industry’s deal pipeline will accelerate over the next two to three years. Mertz said the proposed CMS rule gives buyers roughly twelve months of relative certainty until the next proposed rule cycle. Sellers seeking premium valuations will likely need to demonstrate clean compliance records, accurate financials and strong clinical outcomes, while due diligence intensity is expected to stay elevated as audit and clawback risks keep buyers cautious.
Key Questions
Why are compliant home care agencies selling for more?
Buyers face heightened audit and clawback risks, so agencies with clean compliance records, accurate accounting and strong clinical outcomes reduce deal risk. According to Mertz Taggart’s Cory Mertz, these “squeaky-clean” companies still command premium values, while average or below-average operators are largely not selling.
What is the CMS Medicare enrollment moratorium’s effect on M&A?
The moratorium blocks new companies from enrolling in Medicare in certain markets, reducing the supply of providers. According to Robinson+Cole’s Les Levinson, this creates a scarcity factor that makes existing, established agencies more attractive acquisition targets.
How does the proposed 2.4% payment increase affect deals?
CMS proposed a 2.4% aggregate increase to home health payments in July 2026. Mertz said the proposal was more favorable than expected, giving buyers greater certainty about 2027 and a roughly twelve-month window of clarity until the next proposed rule.
Is home-based care M&A activity rising or falling?
Both, depending on the timeframe. The first two quarters of 2026 were weaker than expected due to macroeconomic conditions, but an August Braff Group report found momentum building, with potential deal volume spikes carrying through 2027. Activity remains below the 2021 peak, though today’s deals are described as higher quality.
Source: rss
Halloween Picks
halloween
As an affiliate, we earn on qualifying purchases.
