2026 Home Health and Hospice M&A Outlook: Multiples, Trends, and Payer Risk

The home health and hospice sectors have weathered a storm of regulatory changes and market shifts over the last few years. As we move deeper into 2026, the home health and hospice mergers and acquisitions (M&A) outlook is optimistic but unsurprisingly different from just two years ago. For owners considering an exit, understanding the current landscape is not optional; it is critical to securing a favorable valuation and completing a successful transaction.

The “growth at all costs” era has faded. In its place, we are seeing a disciplined marketplace focused on sustainable margins, clinical compliance, and strategic density. If you are thinking about listing your home health or hospice agency for sale this year, you need to know exactly how buyers are evaluating assets in this environment.

This blog breaks down three pillars defining the 2026 market: valuation multiples, M&A trends, and the evolving risk landscape.

Valuation Multiples: A Return to Fundamentals

One of the most common questions we get asked by those thinking about a potential sale is, “What is my multiple?” In 2026, the answer is as heavily dependent on quality as it is on quantity.

During the post-pandemic boom, we saw inflated multiples driven by cheap capital and a scarcity of assets. Today, private equity and strategic buyers are more discerning. While premium assets such as those with $5M+ in revenue and double-digit EBITDA margins are still commanding strong multiples, buyers are looking at factors such as payer sources, length of stay metrics, and clinical documentation more closely than ever before. Size alone is no longer sufficient to justify premium multiples.

“Platform” versus “Tuck-In”

The valuation gap in acquisitions between larger, premium-grade agencies and smaller ones has widened.

Platform Assets: Larger agencies with robust infrastructure and strong management teams are still seeing aggressive bidding wars. These are foundational investments that are highly sought after by private equity groups but are in low supply.

Tuck-In Assets: Typically, smaller agencies that are added-on or tucked-in to existing platforms. The range runs wide though, from sub-$1MM agencies that are in the early stages of life to longer-standing agencies struggling to keep their doors open to significantly larger operations that may simultaneously be viewed as a platform opportunity. While supply is still somewhat limited, size and profitability are key to stronger multiples and higher valuations. Larger, profitable home health and hospice agencies garner greater multiples.

Despite strong demand for home health and hospice agencies by buyers, the gap in valuations for larger, well-performing assets has widened versus smaller or even larger underperforming assets. Buyers are scrutinizing their options more closely, with a strong focus on payer sources, overall financial performance, and clean clinical processes.

Understanding these key concepts is essential to preparing your agency for an eventual sale and aligning your goals and expectations to achieve a successful M&A outcome.

Emerging Trends Shaping 2026

Beyond the numbers, several operational trends are dictating deal terms. Buyers are not just buying cash flow; they are investing in long-term viability.

1. The Rise of “Value-Based” Readiness

Fee-for-service type models are still king, but the future outlook is ever changing. Buyers are increasingly scrutinizing an agency’s ability to track and report outcomes. Agencies that can demonstrate low hospital readmission rates and high patient satisfaction scores are trading at a premium. Why? Because they are future-proofed against value-based purchasing models that payers are aggressively rolling out.

2. Staffing Stability as a Key Asset

Staffing stability both in your back office and in the field is a critical valuation driver. When a home health or hospice business is brought to market, your staff is one of the most important assets a buyer acquires. Having a strong, stable workforce is not only important to a favorable valuation, but to overall interest levels.

An agency with a loyal back office and consistent roster of clinicians is far more attractive to buyers. Buyers are willing to pay for a stable workforce because it reduces their post-close integration risk.

3. Technology Integration

Buyers are seeking sophisticated EMR adoption, efficient billing cycles, and clean data. If an agency requires a complete technological overhaul or lacks reliable data, the sales and integration process will be arduous and can have uncertain outcomes. Going under LOI is only the beginning stage of a long, challenging process to get to the close of a successful transaction. Any challenges during the diligence process increase the risk of a failed transaction. Technical sophistication and tracking of data are key to increasing the chances of a successful close.

Navigating Payer Risk

Perhaps one of the most significant shifts in the home health mergers and acquisitions landscape is the heightened scrutiny on payer mix and reimbursement risk.

The Medicare Advantage Squeeze in Home Health

Historically and still today, Medicare fee-for-service remains the gold standard for valuation. While it continues to be highly desirable, the rapid growth of Medicare Advantage (MA) cannot be ignored. The challenge is that MA plans often reimburse at lower rates than traditional Medicare.

Agencies that have successfully negotiated favorable MA contracts will see increased interest and valuations. Conversely, agencies with a heavy concentration of low-reimbursement MA patients will face lower interest and valuation headwinds. Diversification can be desirable, but strong payers are still key. With MA penetration being as extensive as it is, a balanced mix that includes traditional Medicare, decent commercial contracts, and manageable MA exposure may be the new sweet spot for buyers.

Recoupment and Audit Anxiety

Regulatory scrutiny has intensified and byers are conducting deeper due diligence on agency practices and clinical documentation than ever before. Areas of particular interest include:

• Eligibility documentation.
• Length of stay metrics.
• Face-to-face encounter compliance.
• Therapy utilization patterns.

Any indications of aggressive billing or lax compliance can quickly derail a transaction. Conducting a review of your agency’s practices and records before going to market can be a vital step. Discovering a compliance issue during due diligence can kill a deal outright or necessitate the renegotiation of price or other unfavorable deal terms.

Strategic Advice for Owners

The 2026 market is active, but it is not a tide that lifts all boats equally. Success favors the prepared.

If you are planning on selling a healthcare business, focus on “clean” growth – clean financials, clean compliance, and clean operations. Buyers are actively seeking and willing to pay a premium for businesses that are “clean” and do not require a massive turnaround effort. Conversely, buyers may show no interest at all in “struggling” businesses.

Is 2026 Your Year?

Timing the market is difficult, but timing your readiness is entirely within your control. The demand for quality home health and hospice assets remains robust, driven by an aging population and the continued shift of care to the home. However, the days of easy deals are behind us. The winners in 2026 will be the owners who present data-driven, compliant, and stable businesses to the market.

Don’t navigate this complex landscape alone.

At Stoneridge Partners, we have decades of experience guiding agency owners through the intricacies of the valuation and sale process. Our approach goes beyond pricing a business; we help owners prepare, position, and execute transactions that maximize value, reduce friction, and increase certainty of close.

Contact us today for a confidential conversation about your agency’s value and how to position yourself for a successful exit.