Les Levinson Sheds Light on Home Care M&A Outlook in 2025

Amidst an evolving healthcare landscape in 2025, home care mergers and acquisitions are gearing up for a transformative year. Investors are increasingly drawn to defensive sectors, and home care—particularly in the mid-market and upper-mid-market—has emerged as a resilient asset class.
Regulatory developments loom large: CMS’s upcoming Medicare home health rule and the final federal budget negotiations will recalibrate reimbursement rates, directly shaping deal valuations and cash-flow forecasts.

At the same time, a burgeoning array of state-level transaction notice and approval requirements is redefining timelines and deal structures, underscoring the need for early, proactive compliance strategies. Although federal antitrust filings remain rare outside the largest deals, regulators are signaling heightened scrutiny of healthcare consolidation for its impact on patient access and pricing—even below HSR thresholds.

Meanwhile, investors previously cautious about tariff risks in other industries are setting their sights on home care’s relative insulation from global trade tensions. In this dynamic environment, success will hinge on marrying regulatory insight with strategic agility, positioning acquirers and sellers to capitalize on the sector’s promising outlook.

To shed some light on the same, we interviewed a home care industry expert to bring his perspective on home care M&A outlook in 2025.

Let us now delve into what he has to say about home care M&A outlook in 2025:

Question 1: What regulatory changes do you think home healthcare providers should be aware of when planning for M&A in the near future?

Reimbursement changes remain critical, since they directly affect cash flow, while shifts in eligibility and operational rules can likewise influence both revenues and expenses. The ultimate federal reimbursement impact hinges on the outcome of budget negotiations in Washington and the scope of any Medicare or Medicaid cuts—and, with Medicaid, on how individual states implement them.

CMS typically publishes its proposed Medicare home health rule—and the corresponding rates for the coming year—in late May or early June, making this cycle particularly telling given the broader budgetary context and evolving healthcare funding priorities.

At the same time, an increasing number of states have enacted or are revising transaction notice and approval requirements. These regulations can alter deal timing, structure, and, in some jurisdictions, restrict private-equity participation.

Parties must therefore identify applicable rules early in the process and assess their potential impact. What began on the coasts is now spreading nationwide, underscoring the importance of proactive regulatory due diligence.

Question 2: How is antitrust regulation affecting home healthcare mergers and acquisitions today?

Because most home care transactions in the mid- to lower-mid market fall below current Hart-Scott-Rodino thresholds, federal antitrust filings rarely apply except in the largest deals. Instead, parties must focus on state-level transaction notices and approval processes, which can affect timing, deal structure, and buyer eligibility.

Nonetheless, federal agencies have signaled heightened scrutiny of healthcare consolidation, reserving the right to challenge transactions on competitive grounds even below HSR thresholds.

As market concentration grows and regulators prioritize patient access and pricing, home healthcare M&A participants should monitor evolving enforcement trends at both federal and state levels.

Question 3: What are some common challenges you’ve seen with regulatory compliance in home healthcare M&A?

Smaller providers often lack the financial and staffing capacity to implement or sustain robust compliance programs. As a result, buyers have adopted more rigorous and conservative compliance due diligence.

When a target cannot promptly address deficiencies to the buyer’s satisfaction—or offer sufficient protections like indemnity escrows—buyers today are far more likely to terminate deals than they were in previous cycles.

Question 4: What key trends do you think will shape the future of home healthcare M&A in the coming year?

Despite broader economic uncertainty in early 2025, healthcare remains a “defensive” investment theme for both private-equity and institutional backers, keeping it an attractive asset class. Home care—largely insulated from tariff risks—stands to draw interest from investors new to the sector or previously on the sidelines.

At Robinson & Cole, we’ve observed sustained mid- and upper-market deal flow in home care, and we expect that momentum to continue through the remainder of 2025.

Conclusion

In closing, home care M&A in 2025 will reward those who pair deep regulatory awareness with nimble dealmaking. As CMS finalizes rates and Washington negotiates federal budgets, reimbursement shifts will redefine valuations.

Simultaneously, a patchwork of state transaction approvals and rising antitrust scrutiny—even below HSR thresholds—demands early, comprehensive diligence. Smaller providers must shore up compliance programs or risk deal derailment, while investors new to home care will capitalize on its defensive appeal and tariff insulation.

Eventually, success hinges on balancing strategic agility with informed risk management, positioning acquirers and sellers to thrive amid evolving policies and sustained investor interest.