A current moratorium on home health and hospice Medicare enrollment could increase demand for mergers and acquisitions in the short term.
The U.S. Centers for Medicare & Medicaid Services (CMS) in May imposed a six-month nationwide moratorium on the enrollment of new hospice and home health providers in Medicare. The pause is intended to address concerns about a surge in new providers that regulators have linked to fraudulent activity in the hospice sector. The measure is part of the government’s broader efforts to reduce fraud, waste, and abuse within federal health care programs.
Rumors have circulated that the moratorium could be extended beyond the six months, though to date CMS has given no indication that will be the case.
The moratorium could limit provider growth via de novos, so some companies may turn towards more M&A, according to Cory Mertz, managing partner of the M&A advisory firm Mertz Taggart.
“Overall we’re going to see a small net positive in terms of M&A. A lot of private equity firms, especially those, and even some of the public companies, as a way to lower the overall cost of getting into the hospice space, will supplement acquisitions with doing de novos,” Mertz told Hospice News. “I would expect that a lot of these groups will end up being more acquisitive, especially when it comes to add-ons. Those that have a platform and are looking to continue to expand, it’s going to be hard for them to do it via de novo for the foreseeable future.”
The enrollment freeze comes at a time when dealmaking activity is already gaining steam after a years-long slump. Hospice merger and acquisition (M&A) activity increased substantially in the fourth quarter of 2025, reaching its highest transaction volume since 2021. The rate of transactions has proceeded apace so far in 2026.
Though transactions may see a further uptick during the moratorium, associated diligence processes may become more complex, particularly as buyers work to ensure that they are not acquiring compliance issues along with their new assets, according to Michelle Huntsman, partner at the law firm Holland & Knight.
“There are going to be some potential implications for heightened due diligence scrutiny and how transactions are structured. There is going to be more flow of acquisition dollars in M&A activity,” Huntsman previously told Hospice News. “We’re going to see what’s called a flow of de novo development dollars. But providers who undergo changes of ownership or rapid growth also tend to get on CMS’ radar.”
The moratorium could also have an impact on hospice valuations in M&A transactions. Hospices are selling “at a premium” right now, according to Mertz. Increased demand due to reduced de novo activity could further drive up price tags.
Sellers may also see more potential buyers competing for their assets, further driving up valuations, at least for certain types of transactions, Mertz indicated.
“More demand means higher values, not necessarily for platform deals, but for add-ons, for sure,” Mertz said.
