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Home-based care buyers are pursuing deals more selectively, placing greater weight on regulatory compliance, financial performance and care quality. Industry advisers say a Medicare enrollment moratorium may make established agencies more attractive, while a proposed 2.4% payment increase offers more visibility into 2027. The pace and scale of any rebound remain uncertain.
Home-based care dealmaking is shifting toward selective acquisitions, with buyers giving more weight to compliance, care quality and financial performance, according to industry experts quoted by Home Health Care News. The change comes after weaker-than-expected M&A activity in the first half of fiscal 2026 and as a Medicare enrollment moratorium may make established agencies more attractive targets.
Buyers remain interested, but higher financing costs have changed how they approach transactions. Les Levinson, a partner at law firm Robinson+Cole, said low interest rates and debt-heavy financing helped drive the acquisition environment in 2021. Buyers now need to commit more equity, raising the cost of deals and leading private equity firms to deploy capital more selectively. Levinson attributed weak first- and second-quarter 2026 performance in part to macroeconomic conditions, including interest rates and global disruptions.
Quality and diligence are separating potential sellers. Cory Mertz, co-founder and managing partner of Mertz Taggart, told the publication that companies with accurate accounting and strong operations can still command premium values, while average or below-average businesses have struggled to sell. Jason Growe, founder and chief development officer of LiveWell Partners, said current deals are stronger in profitability and care quality than deals during the earlier surge.
Regulatory compliance is central to buyer confidence. Levinson said the CMS moratorium on new home health Medicare enrollments may increase the appeal of existing agencies that meet its standards. Growe said LiveWell has increased its attention to compliance and due diligence over the past several years. The company acquired Michigan Community VNA Home Health and Hospice in July, its third deal in Michigan, according to the report.
Compliance Shapes Buyer Confidence
Compliance can affect whether a deal closes and its value. Levinson said buyers are more confident when a provider can answer diligence questions quickly and clearly. Uncertainty about practices can raise concerns and disrupt a transaction. In a market where buyers are more selective, providers’ records, accounting and ability to document their operations may influence which businesses attract offers.
The enrollment moratorium may also affect the pool of targets. If new agencies cannot enroll in Medicare, existing compliant providers could become more attractive to buyers seeking access to established operations. The report presents this as an industry interpretation of the policy’s effects and does not quantify any resulting change in deal values or transaction volume.
Investors continue to show interest in home-based care because it can cost less than facility-based care and many patients prefer receiving care at home, Growe said. He said the sector remains attractive to investors, though the report does not establish whether that interest will increase completed acquisitions.
From 2021 Boom to Selective Deals
The current market differs from the 2021 acquisition surge. Levinson said inexpensive capital and low rates made it easier for private equity firms and other buyers to finance acquisitions with debt. With buyers now required to put more equity into transactions, the economics favor more selective purchasing.
Recent indicators point in different directions. Levinson described the first two fiscal quarters of 2026 as weaker than expected. An August report from the Braff Group, a Pittsburgh-based M&A advisory firm, said home-based care dealmaking was gaining momentum and that deal volume could rise, potentially carrying into 2027. The report’s forecast is not a confirmed outcome.
Payment policy is another factor buyers are watching. In July, CMS proposed an aggregate 2.4% increase in home health payments. Mertz said the proposal was more favorable than expected and offered greater certainty about 2027 payments for the coming year, until the next proposed rule. The figure is a proposal, not a finalized payment change.
““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 Rebound Remains Unproven
The timing and size of any recovery are not settled. The Braff Group report described potential momentum into 2027, while Levinson cited weak results in the first half of fiscal 2026. The available source does not provide a transaction count, deal-value data or a common baseline that would show how much activity has changed.
The moratorium’s effect on valuations is also unclear. Levinson said it could benefit established providers, but the report does not quantify the effect or detail how many potential sellers meet the relevant standards. CMS’s proposed 2.4% payment increase also remains subject to the rulemaking process. The report’s available text ends as it begins to describe further buyer geographic preferences, so those details are not established here.
Watch CMS and Deal Flow
Buyers and sellers will be watching CMS’s final home health payment rule and the next proposed rule, which Mertz said would follow in about 12 months. The market will show whether the proposed payment outlook and availability of established agencies coincide with an increase in completed transactions.
Growe said the deal pipeline could accelerate over the next two to three years. This remains a forecast. Evidence of a sustained rebound will depend on reported deal activity and whether buyers continue to find providers with sound finances, strong care quality and clear compliance records.
Key Questions
Why are home-based care buyers becoming more selective?
Higher financing costs require buyers to commit more equity to acquisitions. Advisers also say buyers are paying closer attention to profitability, care quality and regulatory compliance.
How could the Medicare enrollment moratorium affect deals?
Levinson said the moratorium on new home health Medicare enrollments may make established agencies that meet its standards more appealing to buyers. The report does not quantify any effect on prices or deal volume.
Has home-based care M&A activity rebounded?
A rebound is not confirmed. Levinson described weak first- and second-quarter 2026 performance, while an August Braff Group report said activity was gaining momentum and could rise into 2027.
Is the proposed 2.4% home health payment increase final?
No. CMS proposed an aggregate 2.4% increase in July. The source describes it as a proposal, not a finalized payment change.
Source: rss
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