The Freeze Is Rewriting Hospice Growth — Why "Affiliation" Is Replacing the Straight Acquisition

The Medicare enrollment freeze is pushing hospice and home health organizations toward affiliations, minority positions, and shared infrastructure arrangements. This article explains what those structures can accomplish, where they still face CMS ownership restrictions, and why the difference between a COI and a CIMO can determine whether Medicare participation continues without interruption. Owners and nonprofit leaders will also find practical questions to ask before signing and an illustrative framework for understanding how operating improvements can affect transaction value.

9/24/20268 min read

The Medicare enrollment freeze is changing how hospice and home health owners pursue growth, succession, and transactions. As straight acquisitions and de novo expansion become more complicated, affiliations, minority positions, and shared infrastructure arrangements are gaining attention, but the structure alone does not eliminate ownership or enrollment risk.

Quick Scan Summary

Who this is for

Hospice and home health owners with $2 million to $10 million in annual revenue
Nonprofit hospice leaders protecting mission, local identity, and community access
Owners considering a sale, affiliation, minority investment, or succession plan
Buyers evaluating existing Medicare-enrolled providers
Operators in certificate of need states where new market entry is already restricted

Key takeaways

The CMS moratorium blocks new Medicare enrollments and certain changes in majority ownership.
An affiliation is not automatically exempt from CMS ownership rules.
A change of information, or COI, may preserve an existing CCN and provider agreement.
A change in majority ownership, or CIMO, may terminate the existing enrollment and require a new application.
Nonprofits are increasingly using affiliations to build scale while protecting mission and local trust.
Sellers should understand control rights, liability, economics, and future conversion rights before signing.
Senate Healthcare is evaluating home health and hospice acquisitions and strategic partnerships with owners seeking a practical path forward.

Why the freeze changed the growth playbook

CMS imposed nationwide moratoria on new Medicare enrollment for hospices and home health agencies effective May 13, 2026. The moratoria initially run for six months and may be extended through additional Federal Register notices.

The CMS Home Health and Hospice Nationwide Moratorium Q&As state that new initial enrollment applications submitted during the moratorium will be denied. The freeze also covers nonexempt CIMOs that would otherwise require a new initial enrollment under the 36-month rule. Hospice News reports that CMS stipulated it would give at least 60 days' notice prior to the moratoria's expiration, but the agency has not yet indicated whether it will extend them. Owners should therefore plan for either outcome rather than waiting for a confirmation that may arrive late.

That has slowed organic growth. According to Hospice News, Medicare certifications in various stages of application and regulatory approval have slowed to nearly a grinding halt.

For a hospice owner, this changes the question from, “Where can we open next?” to, “Which existing organization can help us expand access, protect the mission, and build infrastructure without creating a prohibited enrollment event?”

Mark Kulik, senior managing director at The Braff Group, told Hospice News that the moratoria could lead to more nonprofit affiliations, particularly in states with certificate of need policies.

Kulik also said the freeze “may go longer than six months and be extended during the Trump administration because there’s so much pressure to find the fraud.”

> “If the moratorium stays in place, then these nonprofits are certainly as much of an attractive target as a for-profit, especially if you look at certain CON states. There are no other options, and that’s going to elevate the attractiveness and valuation for these nonprofit providers.”

An affiliation may help an organization work around the practical limitations of the freeze. It does not, however, turn a prohibited change in ownership into a permissible one.

What the affiliation wave looks like

Affiliations are not one uniform transaction. They may involve shared services, a parent organization, a minority investment, a management agreement, a nonprofit combination, or a broader integration that eventually leads to a merger.

Hospice News reports that smaller affiliations are difficult to measure because many are underreported, underrecognized, or never publicly announced. The same report describes a sharp increase in nonprofit-to-nonprofit activity.

Kulik said:

> “The nonprofit-to-nonprofit connection has been almost at a 45 degree angle increase.”

He connected that growth to rising costs, thinner margins, workforce pressure, and the need to protect mission. For many nonprofit leaders, the decision is not simply whether to grow. It is whether the organization can remain sustainable without building economies of scale.

Andrew Molosky, president and CEO of Chapters Health, described the change this way:

> “I think the biggest evolution is actually the number of organizations that see affiliations, regardless of the structure, as the path forward. I believe the industry is embracing the need to band together, to share resources and find benefits of scale at a rate that is unprecedented, and that is elevating the overall discussions across the board.”

Chapters Health, established in 1983, provides hospice, palliative care, and home health through a network of 30 medical organizations and programs. Its broader platform also includes durable medical equipment, pharmacy services, and PACE. The organization recently completed an affiliation with Oregon-based Housecall Providers.

Empath Health offers another example. The Florida nonprofit provides hospice, palliative care, home health, bereavement, HIV and sexual wellness care, and PACE. After emerging from a 2020 merger with Stratum Health, Empath completed an affiliation with Trustbridge. The combined Empath Trustbridge Health now serves one in five Florida hospice patients daily, according to Hospice News.

Tarrah Lowry-Torres, COO of Empath Health, said nonprofit affiliations are moving beyond traditional consolidation models. Organizations are increasingly trying to preserve local identity and community trust while gaining access to larger systems and shared resources. She also said mission alignment is the primary focus of Empath's strongest affiliate relationships, and that the most successful ones are rooted in a shared goal to strengthen care across each organization's service region rather than being oriented solely around a growth initiative.

> “We consider whether we can be stronger together. Today’s healthcare environment is increasingly complex. Hospices benefit from the scale that comes with shared infrastructure and best practices, but they also need the flexibility to remain responsive to local needs. The organizations that strike that balance are best positioned for long-term success.”

Other affiliations cited by Hospice News include Cadre Hospice and Inspire Hospice and Palliative Care, along with HomeCare & Hospice of the Valley and Sangre de Cristo Community Care.

The two ownership pathways that decide everything

The word “affiliation” does not determine the regulatory outcome. The ownership rights, voting rights, legal entity, timing, and cumulative ownership changes determine whether a transaction is reported as a COI or treated as a CIMO.

The Nixon Peabody legal alert describes the distinction as follows:

Hospice leaders and a strategic buyer reviewing mission, staffing, quality, access, and sustainabili

A stock or membership interest transaction may look like a COI because the legal entity remains in place. But if the transaction results in more than 50 percent direct ownership change within 36 months after initial enrollment or the most recent CIMO, the CIMO rule may still apply.

The same issue can arise through multiple transactions. A series of ownership changes can have a cumulative effect during the rolling 36-month period.

Asset purchases are especially difficult during the moratorium because they commonly require a new legal entity or new enrollment. They also generally do not provide the same Medicare continuity as an equity transaction.

Equity transactions create a different risk. The buyer acquires the existing entity and its historical liabilities, including potential overpayments, False Claims Act exposure, regulatory enforcement matters, employee claims, and tax liabilities. A transaction that preserves the CCN may also preserve the historical risk.

What affiliation can and cannot solve

This distinction matters for both nonprofits and for-profit agencies. An affiliation may improve operating performance, but a buyer will still underwrite census, payer mix, staffing, compliance, referral concentration, and normalized EBITDA.

For example, suppose a hospice produces $600,000 of normalized EBITDA. At an illustrative 5 times multiple, the enterprise value would be $3 million. At 6 times EBITDA, the value would be $3.6 million.

An affiliation that reduces administrative expense by $150,000 could increase normalized EBITDA to $750,000. At the same 5 times multiple, the implied value would be $3.75 million. At 6 times, it would be $4.5 million.

These are illustrative scenarios, not market quotes. They show why buyers focus on durable operating improvement rather than the affiliation label. If savings depend on untested staffing reductions, uncertain referral volume, or a future regulatory change, the buyer may not give full credit for the projected improvement.

How buyers should read nonprofit scarcity

Kulik told Hospice News that if the moratorium ends as scheduled, the “valve could open pretty quickly” for de novo activity. That scenario cuts both ways.

Existing nonprofit hospice assets may attract more interest because they offer an operating history, an established referral network, a trained workforce, and an existing Medicare enrollment. For-profit buyers and private equity groups may seek those assets more aggressively, particularly in CON states where new entry is difficult.

At the same time, new de novo activity could give buyers more alternatives. That could reduce the scarcity premium for some providers, especially agencies with weak margins, compliance concerns, concentrated referrals, or heavy dependence on one executive.

The strongest nonprofit organizations should therefore view the current period as a preparation window. Mission quality and community trust are valuable, but buyer underwriting will also test:

Normalized EBITDA and cash flow
Census and length of stay
Skilled labor retention
Referral concentration
Regulatory history
Leadership succession
Cost per patient day
Billing and collection trends
The sustainability of local fundraising
The legal structure of the proposed affiliation

What sellers should ask before signing

Before entering an affiliation or strategic transaction, owners and nonprofit boards should ask:

Who owns the Medicare enrolled entity after closing?
Confirm the direct and indirect ownership chain, not just the public facing brand.
Does the structure create a CIMO?
Review all ownership changes during the prior 36 months, including earlier minority transactions that may have a cumulative effect.
Who controls the board and major decisions?
Economic ownership, voting control, reserved powers, and appointment rights should be clearly documented.
Does the transaction preserve the existing CCN and provider agreement?
Do not assume that an affiliation avoids new enrollment merely because the parties use that word.
Who carries historical liabilities?
The agreement should address overpayments, audits, investigations, employee claims, tax matters, and compliance issues.
What happens to the local brand and mission?
Define control over community relationships, referral partnerships, fundraising, patient access, and service standards.
How will value be measured?
Sellers should understand whether consideration is based on EBITDA, cash flow, assets, future performance, or a combination of factors.
What happens if the moratorium is extended or lifted?
Include clear provisions for delayed approvals, changed enrollment rules, new locations, and future conversion rights.
What information will the buyer receive?
A buyer will need financial, clinical, enrollment, compliance, staffing, and referral data to underwrite the transaction.
What is the exit or succession path?
A minority position may provide near term capital but leave the owner with future control and liquidity risk.

Plain Language Glossary

Affiliation: A relationship between organizations that may involve shared services, governance, ownership, management, or clinical resources.
COI: A change of information reported to update an existing Medicare enrollment without creating a new provider.
CIMO: A change in majority ownership that may require the provider to enroll again as a new organization.
CCN: The Medicare Certification Number assigned to a participating provider.
De novo: A newly created provider or location entering the market for the first time.
CON state: A state that uses certificate of need rules to regulate certain healthcare expansion and market entry.
Buyer underwriting: The process of testing financial, operational, legal, regulatory, and quality risks before setting price and deal terms.

So what should you do now?

Map every ownership change involving the Medicare-enrolled entity during the prior 36 months.
Ask counsel to classify the proposed structure as a COI or CIMO before signing a letter of intent.
Build a buyer-ready data room with financial, staffing, compliance, enrollment, quality, and referral information.
Decide whether your priority is mission preservation, operating scale, immediate liquidity, succession, or a combination of those outcomes.

Partner with Senate Healthcare

Senate Healthcare LLC is the buyer and strategic partner pursuing acquisitions of home health and hospice agencies. We work directly with owners and nonprofit leaders evaluating a sale, affiliation, minority investment, or longer-term succession path.

An organization does not need to be perfectly positioned today to begin a confidential discussion. We can evaluate the agency’s operating performance, enrollment history, ownership structure, mission priorities, and transition goals while considering a transaction that reduces avoidable risk and protects continuity of care.

If you are considering an affiliation or sale, contact Senate Healthcare to discuss whether a direct partnership with a strategic buyer fits your organization’s next stage.

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