Hospice and home health provider Traditions Health, LLC has acquired Tomball, Texas-based Hospice with Grace, expanding the company’s footprint in the Houston region. Financial terms of the transaction were not disclosed.
Traditions is a portfolio company of family-owned investment firm Dorilton Capital Advisors that operates in Texas, California and Arizona. The hospice provider has been on a growth trajectory during 2019 and into 2020.
“I am extremely excited to extend our presence in Texas and serve the community of Tomball and the greater Houston area,” said Bryan Wolfe, president and CEO of Traditions, in a statement.
The hospice M&A market continues to stay hot despite a brief dip due to the fallout of the COVID-19 pandemic, driven by demographic tailwinds stemming from the aging population, as well as disruption in the home health space due to implementation of the patient-driven groupings model (PDGM). Uncertainties surrounding PDGM have led some companies that offer both services lines to pivot towards an emphasis on hospice growth.
Effective Jan. 1, 2020 Medicare began reimbursing home health care providers through PDGM, which classifies patients into payment categories based on clinical characteristics and other patient information, and shifts the home health payment model to a 30-day payment period rather than the current 60-day episode.
“We may have had a few deals get pushed back or killed due to COVID-19, but most of this dip is a predictable result of PDGM,” Cory Mertz of the M&A advisory firm Mertz Taggart said in a report. “Buyers want to wait until the dust has settled on PDGM and see how potential targets perform under the new model, which requires at least a few months of financial and patient data.”
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