The home health and hospice sector have seen a slowdown in merger and acquisition activity in 2017, according to new acquisition data from HealthCareMandA.com.
After a strong first quarter with 15 transactions announced, deal volume fell to 10 transactions in the second and third quarters. The third quarter's low acquisition volume was also 17 percent below the number of acquisitions in the third quarter of 2016, when 12 transactions were made public.
The Centers for Medicare and Medicaid Services has issued several new and proposed regulations for 2018, including a proposal to modernize the payment system with the home health groupings model, and an $80 million cut in reimbursement to the industry for 2018.
Still, publicly traded companies continued to acquire. Amedisys, The Ensign Group and HealthSouth's Encompass Home Health and Hospice division each announced one transaction. Two private equity firms, Boyne Capital Partners and The Riverside Company, also made acquisitions. No financial terms were disclosed for the 10 deals in the third quarter.
"The good news is that deal volume was on par with the second quarter and didn't slip further," said Lisa Phillips, editor of The Health Care M&A Report, in a statement. "What happens on the regulatory side will determine this sector's health in the coming year."