Home health consolidation is playing out among national and regional providers as companies look for ways to expand their footprint and gain leverage with Medicare Advantage plans.
Companies are stepping back into the market to snatch up smaller companies after taking a breather from buying in the first half of 2024, according to advisory firm Mertz Taggart, which tracks healthcare deals. Some home health organizations that have expanded through acquisitions are using scale to negotiate higher reimbursement rates from Medicare Advantage plans by up to 7% in return for greater patient access to services.
Sioux Falls, South Dakota-based Good Samaritan Society is open to acquiring small home health businesses in mostly rural communities to increase scale after acquiring three rural operators in the past year, according to President and CEO Nate Schema. The non profit operates in 10 states, mostly in the Midwest.
“[Staffing] pressures, inflation and higher wages are pushing some of these smaller home health agencies, especially in rural communities, into unsustainable situations,” Schema said.