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Home-based care dealmaking is shifting toward selective acquisitions, with buyers prioritizing compliance, financial performance and quality of care. Industry advisers say a Medicare enrollment moratorium may make established agencies more attractive, while a proposed 2.4% payment increase adds near-term certainty; the pace and scale of any recovery remain uncertain.
Home-based care dealmaking is entering a more selective phase, with buyers placing greater weight on compliance, financial performance and quality of care than they did during the acquisition surge around 2021, industry experts told Home Health Care News. A Medicare enrollment moratorium may also make established agencies more appealing targets, though experts differ on how quickly overall transaction activity will recover.
Buyers remain interested in the sector but are scrutinizing companies more closely, according to Cory Mertz, co-founder and managing partner of healthcare M&A advisory firm Mertz Taggart. Providers with accurate financial records and strong operations can still command premium values, he said, while average or weaker businesses that might have sold in the past are finding it harder to transact. Buyers are also weighing audit and repayment, or clawback, risks.
The financing environment has changed since 2021, when low interest rates and inexpensive debt helped private equity firms and other buyers pursue acquisitions more aggressively. Les Levinson, a partner and co-chair of the transactional health law group at Robinson+Cole, said buyers now need to contribute more equity, raising the cost of deals and encouraging more selective investment. He attributed weaker-than-expected performance in the first two fiscal quarters of 2026 largely to macroeconomic conditions, including interest rates and global disruptions.
There are signs of potential improvement, but not a return to the earlier peak. An August report from The Braff Group said home-based care dealmaking was gaining momentum and could grow into 2027. Jason Growe, founder and chief development officer of LiveWell Partners, said investor interest reflects the lower cost of providing care at home and patients’ preference for receiving care there. He characterized recent transactions as stronger in profitability and care quality than deals made during the earlier surge.
Why Compliant Agencies Gain Leverage
The shift could widen the gap between providers that are ready for buyer scrutiny and those that are not. Strong compliance records, reliable financial reporting and prompt, well-supported responses can build buyer confidence, while uncertainty about practices may slow diligence or threaten a transaction. Levinson said compliance can preserve value, increase it, or cause a deal to stall or fall through.
The enrollment moratorium may add another factor: if new agencies cannot enter Medicare, buyers may have fewer routes to acquire or build a presence in the program. Levinson said that could make established agencies meeting the moratorium’s standards more attractive. That is an industry interpretation of the policy’s possible market effect, not a guarantee that every existing provider will become a viable target or sell at a higher price.
For operators, the practical consequence is that readiness matters even when a sale is not imminent. Buyers’ focus on audit exposure, reimbursement and care quality could shape investment decisions and consolidation across local markets. The proposed payment increase may support interest in home health, but it does not remove the financing and regulatory risks weighing on transactions.
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From 2021 Surge to Selective Deals
The current market follows a much more aggressive period around 2021. Low borrowing costs enabled buyers to use more debt, while competition for acquisitions was stronger. As financing became more expensive, buyers had to commit more equity and became more selective about which providers justified the price and risk.
Policy changes and reimbursement expectations are now part of that calculation. CMS has imposed a home health Medicare enrollment moratorium, which experts say could increase the appeal of established, compliant agencies. Separately, CMS proposed a 2.4% aggregate increase in home health payments in its July proposal for the 2027 payment year. The increase is proposed, not a final payment decision.
LiveWell’s recent activity offers one example of continued acquisitions amid the more cautious market. The company acquired Michigan Community VNA Home Health and Hospice in July, marking its third deal in Michigan. Growe said LiveWell has increased its attention to 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
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Deal Pace and Policy Still Unsettled
The outlook for transaction volume is not settled. The Braff Group’s August report pointed to possible momentum through 2027, while advisers also cited weak performance in the first two fiscal quarters of 2026. The source material does not provide deal counts, transaction values or a quantified comparison with earlier periods, so the extent of any rebound cannot be measured from these accounts.
It is also unclear how much the enrollment moratorium will affect individual sale prices or how many agencies meet its standards. CMS’s proposed payment increase is not final, and the policy and reimbursement picture could change. Experts’ projections about a faster pipeline over the next two to three years are forecasts, not confirmed outcomes.
The report also says buyers may change their geographic focus, but does not specify which markets they will prioritize or how that could alter competition. Details on financing terms and valuations for recent deals were not provided.
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Next Tests for Home Care M&A
Buyers and sellers will be watching CMS’s next steps on the proposed 2027 home health payment rule, as well as how the enrollment moratorium is applied. The proposal’s 2.4% aggregate increase, if adopted, would give providers and investors more clarity on near-term payment expectations; the final policy remains pending.
Over the coming months, transaction activity will show whether the reported improvement in deal momentum becomes visible in completed acquisitions. Levinson, Mertz and Growe point to compliance diligence and provider quality as central considerations, while Growe expects the deal pipeline to accelerate over the next two to three years. That forecast will be tested against financing costs, regulatory risk and buyers’ willingness to pay for well-prepared agencies.
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Key Questions
What is changing in home-based care dealmaking?
Buyers are being more selective than during the 2021 acquisition surge, focusing more on compliance, accurate financial records, profitability and quality of care.
How could the Medicare enrollment moratorium affect acquisitions?
Industry experts say limits on new Medicare enrollment may make established agencies that meet the applicable standards more attractive to buyers. The effect on specific companies and sale prices is not yet clear.
Is CMS’s proposed 2.4% home health payment increase final?
No. CMS proposed a 2.4% aggregate increase for home health payments in its July proposal for 2027. The source report does not describe it as finalized.
Are home-based care acquisitions increasing?
An August report from The Braff Group said dealmaking was gaining momentum and could carry into 2027. However, experts also described weaker-than-expected performance in the first two fiscal quarters of 2026, and the available material gives no deal-volume figures to confirm the size of a rebound.
What makes a home care company more attractive to buyers?
Experts cited strong compliance practices, reliable accounting, clear responses during due diligence, sound financial performance and quality care. These traits can increase buyer confidence, but do not guarantee a sale or a particular valuation.
Source: rss
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