Since 2010, there have been 135 reported transactions of private duty home care companies, though Wyatt Matas and DealZumo.com’s estimates that there are just as many unreported transactions. In such a fragmented industry, with technology and investments shaking things up, that number is expected to rise at an ever increasing pace.
Senior Helpers, one of the largest home care franchises, was sold to Altaris Capital, a private equity group, for $125 million. The purchase price represents an impressive 12.5x EBIDTA. Senior Helpers operates in 298 locations, with $244 million in annual revenue.
Combining the franchise acquisitions and venture capital investments in private pay home care amounts to almost $1 million over the last 30 months. Investors are attracted to the industry because of the relative lack of regulations and the growing demand.
The OIG investigated over 200 cases of potential fraud and abuse in the Medicaid Personal Care Services program, which pays for home care services for Medicaid patients. Fraud is a strategic threat to the home care industry. The industry has been the target of MedPAC cuts for years, due in part to the fraudulent practices of the early 2000s.
The debate between the best route to accurate hospital claims seems to be settled at 66% of the original claims. CMS’s RACs are criticized for being financially incentivized to find fraudulent or incomplete claims. CMS’s decision to settle appealed claims made before Oct 1, 2013 at $0.66 on the dollar has critics saying that hospitals will submit appeals with the intention of claiming the 66%.
Kindred Healthcare, the nation’s largest home healthcare and hospice provider, is selling off a portion of its SNF’s to dedicate more resources throughout its post-acute continuum. The home healthcare and hospice division grew by 5.5% over last year, while other divisions declined. Kindred’s plan is to increase coordination among all divisions, including SNFs, IRFs, LTACs, home healthcare, hospice and community care.