Compliance, Cash Flow and Leadership Top Hospice Buyers' 2026 Checklist
With hospice M&A rebounding after a three-year slump, buyers in 2026 are prioritizing strong regulatory compliance, solid cash flow, and effective leadership, while sellers face heavier diligence in states under CMS enhanced oversight.
Key Facts
- Affected providers
- Hospice
Hospice buyers in the 2026 M&A market are prioritizing three key factors — strong regulatory compliance, solid cash flow, and effective leadership — as deal activity rebounds after a three-year slump, according to Hospice News.
The Braff Group projects 44 hospice transactions in 2026, roughly double the 25 deals that occurred in 2023, with about 30 of the expected deals being platform or bolt-on acquisitions.
Les Levinson, partner and co-chair of the Transactional Health Law Group at Robinson & Cole, said regulatory compliance has become the single most important buyer criterion, reflecting heavy scrutiny from government and contractor audits and payment clawbacks.
Compliance is especially critical in states subject to CMS's "provisional period of enhanced oversight," which initially applied to California, Arizona, Nevada, and Texas in July 2023 and expanded to Ohio and Georgia in 2026. Cory Mertz of Mertz Taggart recommended sellers run a billing and compliance audit before going to market due to the lower tolerance for billing errors in those states.
Buyers evaluate whether a hospice's cash flow is transferable and sustainable, using current EBITDA as a proxy, and place a premium on strong management teams for platform deals. The Pennant Group was cited as a strategic buyer that prioritizes local management and organic growth promise when acquiring agencies.
Sources & References
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