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Kindred acquires in-home healthcare operations from Arkansas Health Department for $39 million

Kindred reached agreement with ADH following state bidding process; transaction expected to close in third quarter of 2016.

Jeff Lagasse, Associate Editor

Kindred Healthcare and the Arkansas Department of Health have signed a definitive agreement for Kindred to acquire in-home healthcare operations from ADH for about $39 million, which includes licenses to provide home health, hospice and personal care services throughout the state of Arkansas.

Kindred reached an agreement with ADH following a state bidding process. The transaction is expected to close in the third quarter of 2016, pending regulatory approvals

[Also: Kindred Healthcare, Select Medical Holdings complete swap of long-term acute care hospitals].

The transaction will expand Kindred's services from six offices providing home health and hospice in four counties, to offices with those services in 70 of the 75 counties in Arkansas. Kindred will acquire the ADH's 74 home health locations serving 69 counties in the state, seven offices providing hospice services in 42 counties and its personal care services business, which assists patients with activities of daily living.

Louisville, Kentucky-based Kindred, a top-90 private employer in the United States, is a Fortune 500 healthcare services company with annual revenues of approximately $7.2 billion. Through its subsidiaries, it had upwards of 102,000 employees providing healthcare services in 2,700 locations in 46 states.

The company has been involved in several transactions over the past couple of years. Earlier this month, it completed the sale of two of its transitional care hospitals to Select Medical Holdings Corp., while acquiring four hospitals from the latter organization in a hospital "swap" that also included Kindred paying an additional $800,000 in additional cash consideration to Select. When the deal was initially announced in February, Kindred President and CEO Benjamin Breier said the move was in anticipation of new long-term acute care patient criteria eing released by the Centers for Medicare and Medicaid Services; the CMS rule will provide reimbursement at the full payment rate if a patient has spent at least three days in an intensive care unit, or at least 96 hours on a ventilator. Hospital stays that don't meet this criteria would receive a per-diem, site-neutral payment rate.

In January 2015, Kindred wrapped up a $195 million purchase of Centerre Healthcare Corp., a manager of inpatient rehabilitation hospitals.

[Also: Kindred wraps up $195 million Centerre buy, bolsters rehab business]

Nathaniel Smith, MD, MPH, state health officer and director of the Arkansas Department of Health, said in a statement that the agreement between ADH and Kindred "will help to assure sustainability of services to our patients and allow the private sector to take over where the state has begun."

Twitter: @JELagasse

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