Literature Review

Federal report highlights private equity, consolidation concerns Modern Healthcare; by Hayley Desliva; 1/16/25 Three federal agencies on [1/15/25] said "more effective and vigorous" enforcement is needed to protect patients harmed by healthcare's continued consolidation. In a report released just days before a new administration takes over, the Health and Human Services Department, Federal Trade Commission and Justice Department said comments they sought earlier this year on the state of the industry made clear that worries about access to services and costs have intensified as consolidation and private equity's role have grown. ... The report noted several areas of concern: 

Covenant Homecare and Hospice launches partnership with Care Coordinations to enhance communications and patient engagement East Coastsentinel, Knoxville, TN; Press Release, Shawn Zbranek; 1/20/25 Covenant HomeCare and Hospice, ... home health and hospice services in East Tennessee, announced a cutting-edge partnership with Care Coordinations, a company which provides technology solutions to enhance post-acute care. Care Coordinations and Covenant HomeCare are creating new communications functionality within HomeCare HomeBase SM (HCHB), the electronic medical record (EMR) used by Covenant HomeCare. The Care Coordinations platform will consolidate multiple communication channels, enhance patient engagement, and significantly streamline clinical operations.

VITAS eyeing expansion in 12 states Hospice News; by Jim Parker; 1/14/25 Historically, VITAS Healthcare has relied heavily on organic growth, a strategy the company is not turning away from. However, it may add more acquisitions to the mix. VITAS is a subsidiary of Chemed Corp. (NYSE: CHE). The company this year made its return to the M&A market after a hiatus of several years. In April, VITAS acquired Covenant Health and Community Services’ hospice operations as well as one assisted living facility in an $85 million deal. Now, the company is seeking out other targets, with an emphasis on Certificate of Need states. “There are at a minimum 12 states we don’t operate in that we think are very attractive to us, and we are out actively sourcing deals, and we expect some of that deal flow to continue to come through here in 2025 and beyond …” VITAS CEO and Chairman Nick Westfall said during the JP Morgan Healthcare conference. “We think we’re in the early roads of really an ongoing consolidation inside of the space.”

Prospect Home Health and Hospice, LLC bankruptcy filing BankruptcyObserver.com; Case Number 25-80011; 1/13/25 The bankruptcy petition for Prospect Home Health and Hospice, LLC [Northern District of Texas bankruptcy cour] showed assets in the range of more than $1B with liabilities in the range of more than $1B. Prospect Home Health and Hospice, LLC reports that the number of creditors is in the range of more than 100,000.

Healthcare Private Equity Outlook & Trends - January 2025JD Supra; by Emily Burrows, David Cox, Michael Dashefsky, Lara Flatau, Tabitha Green, Anna Grizzle, Angela Humphreys, Stewart Kameen, Travis Lloyd, Jennifer Michael, Lucas Ross Smith, Jonathan Stanley, Ryan Thomas, Nesrin Garan Tift, Shannon Wiley, Roy Wyman, Patrick Zinck; 1/10/25 As some packed the skis and headed to their favorite slopes this winter season, it is hard not to see the analogies to the healthcare private equity (PE) transaction market as we ring in the New Year. Much like the Northern Rockies, there should be plenty of dry powder to support a robust dealmaking environment in 2025. ... [From its attached PDF]

Amedisys halts sale of home health, hospice locations to VitalCaring Hospice News; by Holly Vossel; 1/7/25 Amedisys’ (Nasdaq: AMED) has halted the divestiture of some of its home health and hospice locations to Texas-based VitalCaring. Amedisys in June announced an agreement to sell some of its locations to the private equity-backed home health and hospice provider VitalCaring. ... The news to cancel the divestiture comes after a recent court order issued by a federal judge in Delaware requiring that VitalCaring allocate 43% of future profits to Encompass Health (NYSE: EHC) and Enhabit Inc. (NYSE: EHAB). [Click on the title's link to continue reading.]

Ascension Living residents, employees among 6 million affected by data breach McKnights Senior Living; by Kathleen Steele Gaivin; 1/6/24 Senior living and care residents and employees are among the six million people Ascension said Dec. 19 that it was notifying of potential stolen personal information in the wake of a May 8 ransomware attack. The St. Louis-based nonprofit healthcare network, which includes Ascension Living, operator of three dozen senior living and care communities and also a provider of home care and hospice services, announced Dec. 19 that a review by third-party experts of the attack was complete. On that date, Ascension began notifying individuals whose personal information was involved and is providing them with free credit monitoring and identity protection services.

Hospice M&A market to ‘return to sanity’ in 2025 Hospice News; by Holly Vossel; 1/2/25The hospice mergers and acquisitions market has seen a host of changes in recent years, with buyers and sellers examining a range of risks and opportunities in the field this year. The industry saw a flurry of M&A activity in 2019 and 2020, with record high valuations and deal volume. Subsequent years saw cooling periods that left many operators wondering what’s next in store as 2025 unfolds. The previous “buy, buy, buy” mentality among hospice investors has morphed into a more disciplined strategic approach, according to New Day Healthcare LLC CEO G. Scott Herman. Certain lessons learned are driving future hospice investment decisions, particularly those around valuations and keys to sustainable growth, Herman said during a recent Hospice News Elevate podcast. [Click on the title's link to continue reading.]

UnitedHealth Group waives deadlines to complete $3.3B home health acquisition The MInnesota Star Tribune; by Brooks Johnson; 12/27/24 UnitedHealth Group has filed for more time to complete a $3.3 billion deal to buy Amedisys, a home health care and hospice company, after the companies agreed to waive deadlines in the face of antitrust scrutiny. The U.S. Department of Justice and several states last month sued to block the deal, alleging the merger would give the Minnetonka-based health care conglomerate a commanding stake in many areas. “ ... UnitedHealth and Amedisis agreed to waive two deadlines to complete the deal, according to a Securities and Exchange Commission document filed Friday. One would have given 10 days after a court ruling to complete the deal; the other gave the companies until the end of 2025. UnitedHealth will now have to pay $275 million if the company backs out of the deal, a $25 million increase, and that figure could rise to $325 million.

Providence’s joint venture with Compassus likely delayed amid concerns about patient care and rural access Home Health Care News; by Audri Martin; 12/19/24Oregon’s Health Care Market Oversight (HCMO) program is reviewing a proposal to spin off Providence’s home health and hospice services into a joint venture supported by private equity. ... OHA’s HCMO program evaluates health care business transactions to ensure they do not negatively impact citizens or communities. The program also empowers state regulators to impose conditions on acquisitions and mergers or reject deals they find anti-competitive. Critics of the deal argue that the joint venture will result in cost-cutting measures, increased staff workloads and reduced patient services. Providence is the fifth largest nonprofit health care provider in the United States, while Compassus is a private equity-backed provider of home-based care services operating in more than 30 states. 

Cherish Hospice celebrates new location in Springfield Springfield News-Sun; by Brooke Spurlock; 12/17/24 Cherish Hospice celebrated its new headquarters location at 1929 E. High St. in Springfield [OH] on Tuesday. Cherish officials said that since 2021, they have served hundreds of patients in Southwest Ohio, with a staff of more than 25 caregivers and a volunteer program. “This is a great symbol of us, how we’ve grown,” said Jason Casto, administrator for Cherish Hospice. “This is a ribbon cutting event to celebrate our growth and the fact that we plan to remain here in Springfield as a staple.”

Santa Paula doctor sentenced to 2 years in federal prison for role in hospice fraud that bilked Medicare out of $3.2 million United States Attorney's Office - Central District of California; Press Release, Los Angeles, CA; 12/16/24 A Ventura County physician who worked for two Pasadena hospices was sentenced today to 24 months in federal prison for defrauding Medicare out of more than $3 million through claims for medically unnecessary hospice services. Dr. Victor Contreras, 69, of Santa Paula, was sentenced today by United States District Judge André Birotte Jr., who also ordered him to pay $3,289,889 in restitution. Contreras pleaded guilty on July 24 to one count of health care fraud. From July 2016 to February 2019, Contreras and co-defendant Juanita Antenor, 62, formerly of Pasadena, schemed to defraud Medicare by submitting nearly $4 million in false and fraudulent claims for hospice services submitted by two hospice companies: Arcadia Hospice Provider Inc., and Saint Mariam Hospice Inc. Antenor controlled both companies. Editor's note: This press release follows-up on the post we recently posted: Glendale woman and Lakewood man found guilty of $3.2 million hospice fraud scheme involving kickbacks for patient referrals. 

Why private equity healthcare investment may rise in 2025 Modern Healthcare - Mergers & Acquisitions; by Alex Kacik; 12/12/24 Private equity investment in healthcare is expected to pick up in 2025 but still fall short of the highs of 2021, merger and acquisition advisers said. Private equity-linked healthcare transaction volume is poised to rebound after a sluggish 2024 as interest rates cool, state-led oversight bills lose momentum and a new presidential administration begins. Corporate investors will likely prioritize deals that involve healthcare information technology and other administrative support services over physician practices, industry observers said.