M&A activity snapshot
Deal count in home-based care fell in the second quarter of 2026, but deal size did not. Mertz Taggart tracked 16 closed home-based care transactions in Q2 2026, down from 27 in Q1 2026 and 29 in Q2 2025. Hospice and home care tied at 8 closed deals each, and skilled home health closed 6.
Two Q2 closings rank among the largest in the sector's history. General Atlantic acquired TEAM Services Group from Alpine Investors for a reported ~$3 billion. Kinderhook Industries took Enhabit private at roughly $1.1 billion enterprise value. New platform formation (6 deals) outpaced sponsor-backed add-ons (4), a reversal of recent years.
The sector is large and still fragmented. In 2024, about 2.7 million Medicare FFS beneficiaries received home health care, and Medicare spent $16.0 billion on it. That year, over 12,000 HHAs were certified to participate in Medicare. It also notes that investor interest in home health care services has slowed since 2023, after a peak period for agency M&A.
Who is buying
The biggest recent strategic move came from a payer-owned operator. UnitedHealth's $3.3 billion merger with Amedisys cleared the Justice Department only after a settlement. It required the companies to divest 164 home health and hospice locations across 19 states, roughly $528 million in annual revenue.
Public post-acute companies picked up those assets. Under the settlement, BrightSpring will acquire 115 divested sites, while Pennant will acquire 49. Other public strategics are buying in adjacent home-based segments. Addus HomeCare acquired HomeCourt Home Care, marking its entry into Indiana. Aveanna Healthcare agreed to acquire Family First Homecare for $175.5 million, a pediatric private-duty nursing provider.
Private equity is the steady source of hospice add-ons. In Q2 2026, Webster Equity Partners-backed Bristol Hospice acquired Hope Hospice & Palliative Care, and Norwest made a platform investment in Ennoble Care. Health systems are also selling. Deacon Associates agreed to acquire 31 home health and hospice agencies from HCA Healthcare, a deal not yet closed at quarter-end.
What buyers look for
Buyers are paying for clean operations more than for growth. Mertz Taggart lists the profile that still earns premium pricing: strong financials, clean compliance histories, strong management teams, established referral networks, stable census, and a favorable payer mix. The core diligence metrics follow from that list: census and average daily census, referral-source concentration, Medicare versus Medicare Advantage mix, and survey history.
Enrollment history is now a gating item. Under the 36-month rule, an agency acquired, changed ownership, or was initially enrolled within the prior 36 months may face restrictions on a later change of ownership. Buyers check this before they price anything.
Geography matters for hospice in particular. CMS has imposed heightened screening on hospices newly enrolling or changing ownership in Arizona, California, Georgia, Nevada, Ohio, and Texas. Targets in those states face longer diligence and more structuring questions.
Hospice buyers also model cap exposure. Medicare applies a statutory aggregate cap to the payments each hospice receives annually, and the FY 2027 cap is $36,174.75. A hospice with long average lengths of stay can owe repayments, so buyers review cap liability by year.
What makes a strong company
A home health or hospice agency that reaches the top of the buyer range typically shows:
- A Medicare enrollment history outside the 36-month window, with no pending change-of-ownership issues.
- Stable or rising census fed by several referral sources, not a single hospital or physician group.
- Clean state surveys and accreditation, and no open program-integrity reviews.
- For hospice, a documented history of staying under the aggregate cap, with no recent repayment demands.
- A licensed footprint in certificate-of-need states, where CON approval is often tied to state licensure and limits new competitors.
- Management and clinical leadership that can run the agency without the founder.
Medicare economics remain favorable for efficient operators. FFS Medicare margins for freestanding HHAs averaged 21.2 percent in 2024. For hospice, the aggregate FFS Medicare margin for 2023 was 8.0 percent, down from 9.8 percent in 2022. These are fee-for-service averages and do not reflect Medicare Advantage or Medicaid business.
Valuation and deal structure
Reliable multiple data for small agencies is not published by the major lower-middle-market data providers. The clearest 2026 marker is the Enhabit deal: a 10.2x EBITDA multiple on $108 million of EBITDA, a 24% premium to the undisturbed share price. As a broader proxy, GF Data put healthcare services at 7.7x in its 2026 mid-year read, with a caution that the sample was small. That figure covers all healthcare services, not home health or hospice alone.
Reimbursement shapes what a buyer will pay. CMS cut CY 2026 home health payments in the aggregate by an estimated 1.3%, or $220 million, including a permanent prospective adjustment of -1.023% tied to PDGM behavior assumptions. The CY 2027 proposed rule would increase payments in the aggregate by 2.4%, or $420 million. It also keeps a temporary 3.0% reduction to the CY 2027 home health base payment rate.
Hospice payments are moving the other way. CMS finalized a 2.3% FY 2027 update, an estimated $755 million increase over FY 2026. MedPAC disagrees with both trends: it recommended Congress reduce the 2026 Medicare base payment rate for HHAs by 7 percent and eliminate the FY 2027 hospice update.
Structure now matters as much as price. On May 13, 2026, CMS imposed a six-month nationwide temporary moratorium on Medicare enrollment for new home health agencies and hospices. During that period, only change of information (COI)-eligible equity deals can preserve Medicare billing without interruption. Sellers should expect delayed closings and renegotiated terms if the moratorium is extended.
State review adds another layer. At least 14 states now require advance notice to the attorney general or a related agency before a private equity, hedge fund, or MSO-affiliated transaction closes. Earnouts and seller rollover are common in sponsor-backed healthcare deals generally, but none of the sources above break out their use for this segment.
Outlook
Expect transaction structure to drive the next 12 to 24 months. The moratorium is initially set to run through approximately November 13, 2026, subject to six-month extensions. While it lasts, agencies with long, clean enrollment histories hold scarce Medicare numbers that new entrants cannot replicate.
Hospice should keep drawing sponsor capital because of steady rate updates, while home health depends on whether CMS holds to the proposed CY 2027 increase. Fraud enforcement and state transaction-review laws will keep diligence long. Owners who clean up compliance and enrollment records before a process are best placed to hold value through closing.
Own a home health or hospice agency and want a starting point before you talk to buyers? Run the valuation tool or read the Healthcare Services M&A overview. See also: why vertical-specific buyers outperform generalists in outbound.