Deal-Making Could Reach Pre-Pandemic Levels in 2027: What It Means for Home Health and Hospice Sellers

Home health and hospice deal-making is gaining momentum, and The Braff Group believes activity could return to pre-pandemic levels in 2027. This article explains how payment visibility, CMS enrollment restrictions, CON state dynamics, and buyer competition may affect timing and valuation. Owners will also learn which compliance, financial, staffing, and payer metrics can strengthen exit readiness. Senate Healthcare is evaluating acquisitions and strategic partnerships with owners who want to reduce risk and plan their next chapter.

9/1/20267 min read

The home health and hospice M&A market is showing clear signs of recovery after several slower years. For agency owners generating $2M to $10M in revenue, the potential return to pre-pandemic deal activity in 2027 creates both an opportunity and a warning: buyers may compete more aggressively for strong agencies, but owners who wait may face greater scrutiny and fewer advantages.

Quick-Scan Summary

Who this is for

Home health or hospice owners with $2M to $10M in annual revenue
Founder-operators considering a sale, succession plan, or strategic partnership
Owners in Certificate of Need states evaluating the timing of a transaction
Leaders who want to improve valuation before buyer underwriting begins

Key takeaways

The Braff Group estimates that home health and hospice could reach approximately 134 healthcare services deals in 2026 on an annualized basis, the highest level since 2022.
Deal activity has increased after four consecutive years of declines and could rise further in both volume and value through 2027.
CMS payment updates are providing more visibility, including a 2.3% hospice increase for FY2027 and a proposed 2.4% home health increase for CY2027.
CMS implemented a nationwide six month moratorium on new provider numbers beginning May 13, 2026. The restriction includes certain non-exempt changes in majority ownership.
Clean compliance, strong clinical performance, documented operations, and reduced owner dependence may create a valuation tailwind.
Waiting has an opportunity cost. A stronger market can improve buyer interest, but only prepared owners are positioned to benefit.

Market Context: A Rebound Is Taking Shape

The Braff Group’s Mid-Year 2026 Update: The Rebound Continues places the current market in context. Deal activity surged in 2020 and 2021, then declined as inflation rose, interest rates increased, and buyers became more cautious.

Braff estimates that the effects of the pandemic continued to influence deal activity through the end of 2024. That means owners should compare current activity with pre-pandemic conditions rather than with the unusual transaction peak of 2021.

The current direction is encouraging. Braff states that healthcare services transaction volume is positioned to exceed pre-pandemic numbers based on annualized first-half 2026 data. In home health and hospice, the report says second quarter activity has established the foundation for a strong period of deal-making over the following 12 months.

The report estimates approximately 134 healthcare services deals across home health and hospice in 2026 on an annualized basis. That estimate combines the major categories tracked by Braff, including certified home health, hospice, Medicaid services, and private duty. It represents the highest overall level since 2022.

The rebound is not limited to home health or hospice. Braff also reports that home medical equipment deal volume is up 63.6% compared with 2025, home infusion and specialty pharmacy transactions are on pace to exceed 2025 by 32%, and healthcare staffing activity is up 17.3%.

What Is Driving the 2027 Outlook?

Several forces are converging.

More predictable payment signals

CMS approved a 2.3% increase in the final hospice payment rule for FY2027. CMS also proposed a 2.4% increase in home health payment rates for CY2027.

These updates do not remove reimbursement risk, but they provide more visibility than the prior cycle. The Braff report notes that many industry insiders believe “CMS may have concluded that it has finally battered home health enough,” creating the possibility of greater payment predictability.

For buyers, predictability matters because underwriting depends on the expected durability of cash flow. For owners, it can make the next 12 to 18 months easier to model when evaluating a sale.

A moratorium limiting de novo expansion

According to the CMS Provider Enrollment Moratoria page, CMS implemented a temporary nationwide enrollment moratorium for home health agencies and hospices on May 13, 2026.

The moratorium applies to initial applications. This includes non-exempt changes in majority ownership that qualify as initial enrollment applications under 42 CFR 424.550(b). CMS states that the moratorium will remain in effect for six months and may be extended in additional six month increments.

The restriction does not stop every ownership change. However, it can affect transactions that require a new initial enrollment application. Owners considering a sale should determine early whether their agency’s structure, ownership history, and transaction design could create an enrollment issue.

More pressure to grow through acquisitions

Mark Kulik of The Braff Group told McKnight’s Home Care that de novo growth is constrained by the moratorium. He noted that the restriction could create “a meaningful supply-and-demand imbalance,” particularly in markets with strong demand and in Certificate of Need states.

The longer the restrictions remain in place, the greater the pressure will be on organizations seeking growth to pursue M&A as the primary viable avenue for expansion. This can increase competition for qualified agencies, but it can also make buyer underwriting more selective.

What This Could Mean for Valuation

A rising transaction market does not automatically mean every agency receives a premium offer. Buyers still underwrite earnings quality, payer risk, staffing stability, compliance history, referral concentration, and leadership depth.

Kulik expects buyers to place an even greater premium on agencies with clean compliance histories, strong clinical performance, and well-documented operating practices. Completed transactions involving high-quality agencies could benefit from a valuation tailwind.

The key distinction is between market valuation and agency-specific valuation. A stronger market may raise the ceiling, but operational risk can still create a discount.

Illustrative valuation scenarios

The following examples are not market guarantees. They show how buyer underwriting can affect enterprise value.

For an owner with $800,000 in adjusted EBITDA, moving from a 4.0x outcome to a 6.0x outcome represents a $1.6 million difference in enterprise value.

Consider two agencies with similar revenue:

Agency A: Strong clinical performance, clean survey history, diversified referrals, documented procedures, and limited founder dependence.
Agency B: Good revenue but unresolved compliance items, heavy reliance on the owner, high staff turnover, and significant payer concentration.

If Agency A receives a 6.0x multiple on $800,000 of EBITDA, its illustrative value is $4.8 million. If Agency B receives a 4.0x multiple, its value is $3.2 million. The difference is not created by revenue alone. It reflects the buyer’s assessment of future risk.

Platform or Add-on? Know How a Buyer May See Your Agency

A home health or hospice agency does not need to be perfect to begin a conversation. However, owners should understand which risks may reduce the upfront purchase price, increase escrow requirements, or result in an earn-out.

CON State Dynamics May Matter More

Certificate of Need states may see especially strong competition for existing agencies because new entrants face additional barriers. If CMS restrictions continue and demand remains strong, an established provider number, experienced workforce, and local referral network may become more valuable to buyers seeking market entry or expansion.

That does not mean every agency in a CON state commands a premium. Compliance problems, weak margins, or poor clinical outcomes can still outweigh geographic scarcity. The advantage belongs to owners who can demonstrate that their agency is both difficult to replicate and relatively low risk to acquire.

The Operator Metrics Buyers Will Watch

Owners should begin tracking performance by payer and referral source, not only at the agency level. For home health agencies with Medicare Advantage exposure, maintain a monthly dashboard covering:

Net reimbursement per completed visit by payer
Authorized visits compared with clinically ordered visits
Denials and appeal overturn rates
Authorization labor hours per 100 Medicare Advantage episodes
Days in accounts receivable by payer
EBITDA margin by payer
Revenue concentration by individual Medicare Advantage plan
Referral volume by payer and referral source

For hospice owners, parallel attention should go to referral concentration, length of stay, live discharge patterns, staffing stability, compliance findings, and payer-specific margin performance.

A 90-Day Readiness Plan

A 2027 transaction does not begin in 2027. It begins with the records and operating discipline an owner creates now.

Review ownership and enrollment history. Confirm whether a potential transaction could involve a non-exempt change in majority ownership requiring initial enrollment.
Build a buyer-ready financial package. Prepare monthly profit and loss statements, normalized EBITDA, payer-level revenue, accounts receivable aging, and explanations for unusual expenses.
Test compliance documentation. Review survey history, plans of correction, clinical documentation, billing records, and outstanding audits.
Reduce founder dependence. Document referral relationships, operating procedures, staffing plans, and decision rights so the agency can function without the owner.
Track performance trends. Do not wait for a buyer to identify margin compression, payer concentration, or authorization inefficiency.

An owner vignette

A home health owner with approximately $5 million in revenue may feel ready to sell because the agency has a loyal referral base and positive EBITDA. During buyer review, however, the owner discovers that one Medicare Advantage plan represents 45% of revenue and that authorization labor is not tracked separately.

The agency may still be attractive. But the buyer may model lower margins, require more diligence, or apply a lower multiple until the risk is better understood. Six to twelve months of clean payer-level reporting could materially improve the owner’s negotiating position.

So what should you do now?

Decide whether your goal is a sale, succession, or strategic partnership and establish a target time frame.
Ask your team to produce the eight payer and referral metrics listed above every month.
Review your compliance and ownership records before a transaction structure is proposed.
Speak directly with Senate Healthcare, the acquiring entity and strategic partner, if you want to explore a sale or partnership for your home health or hospice agency.

Senate Healthcare is pursuing acquisitions of home health and hospice agencies and works directly with owners. We understand that many agencies have improvement areas, and an owner does not need to have every issue resolved before beginning a confidential discussion. The objective is to reduce transaction risk, protect continuity of care, and pursue a structure that supports the owner’s exit and legacy goals.

Plain-Language Glossary

M&A: Mergers and acquisitions, or the purchase, sale, or combination of healthcare businesses.
EBITDA: A common measure of operating earnings before interest, taxes, depreciation, and amortization.
Valuation multiple: The number applied to EBITDA to estimate enterprise value. A 5.0x multiple on $800,000 of EBITDA equals $4 million.
Buyer underwriting: The process of testing whether an agency’s earnings, compliance, and operations are reliable enough to support a purchase price.
De novo growth: Building a new agency or location instead of acquiring an existing provider.
CIMO: A change in majority ownership.
CON state: A state that requires regulatory approval before certain healthcare services or facilities can be developed or expanded.
Earn-out: A portion of the purchase price paid later if agreed performance targets are achieved.
Valuation tailwind: A market or company-specific factor that may support stronger buyer interest or a higher valuation.

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