Holland & Knight - Healthcare Trend Report - Home Health and Hospice by Holland & Knight

Healthcare Trend Report: Home Health and Hospice September 2026

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Content Overview 3 Transactional Trends 4 State of the Market 4 Holland & Knight Representative Transactions (2025-Present)

Industry Insights from Edgemont 5

Regulatory Trends 6 Reimbursement and Payment Policy

Home Health Reimbursement 6 Value-Based Payments 7 Remote Patient Monitoring and Technology-Enabled Care

Strategic Implications for the Sector

Hospice, Palliative Care and Program Integrity

Technology, Privacy and Cybersecurity

State Regulatory Developments 11

Litigation Trends 12 False Claims Act and Government Enforcement

Payer Disputes 13 Employment and Workforce Litigation

Strategic Outlook for 2027 15 Authors 15

Overview Healthcare is no longer defined solely by where care is delivered. Home health and hospice providers have become integral participants in a healthcare system that is steadily extending beyond hospitals, physician offices and other traditional care settings. Advances in remote monitoring and care coordination have enabled more sophisticated care in the home. Meanwhile, hospitals and health systems continue to focus on reducing avoidable admissions, shortening lengths of stay and managing chronic conditions, increasing reliance on home health and hospice providers. Demand for home-based services continues to grow due to an aging population, rising chronic disease prevalence and expanding Medicare Advantage enrollment. At the same time, employers, commercial payers and government programs continue to emphasize value-based care and quality outcomes. Investment activity in home health and hospice has remained resilient. Acquirers continue to pursue opportunities to expand geographic reach, strengthen referral networks and broaden service offerings, while financial sponsors remain interested in businesses with scalable operating models, experienced management teams and opportunities to improve performance through operational efficiencies. Although higher borrowing costs and greater discipline in the transaction market have affected deal volume across the healthcare industry, home health and hospice continue to attract attention because of their essential role within the care continuum and the long-term demand for home-based services. Technology continues to reshape the sector through remote patient monitoring, predictive analytics, artificial intelligence (AI)-assisted documentation and scheduling tools. Digital platforms that support communication among providers, patients and caregivers are changing how care is delivered and managed. These technologies are viewed less as standalone innovations and more as operational necessities that help organizations address workforce shortages, improve clinical oversight and enhance the patient experience. As adoption accelerates, providers must also navigate questions surrounding data governance, cybersecurity, interoperability and the appropriate use of emerging technologies in clinical decision-making. Home health and hospice providers operate within some of healthcare's most heavily regulated sectors. Recent payment updates, evolving Medicare Advantage policies and continued scrutiny of hospice and in-home care eligibility and billing practices underscore the importance of maintaining strong compliance programs alongside growth initiatives. Organizations expanding through acquisitions or entering new markets must also account for varying state licensure requirements, corporate practice considerations and other regulatory obligations that may affect operations and transaction structures. These regulatory and operational pressures are unfolding alongside persistent workforce challenges. Recruiting and retaining nurses, therapists, aides and other clinicians remains a significant concern for providers across the country. Competition for talent, rising labor costs and clinician burnout continue to affect capacity and service delivery, particularly in rural and underserved communities. Many organizations are responding by investing in technology, refining workforce strategies and exploring alternative staffing models, but labor availability remains a defining factor in both operational performance and long-term growth. Together, these developments are reshaping the home health and hospice market, requiring providers to balance care quality, operational performance, compliance and long-term growth. The trends explored throughout this report reflect an industry that continues to mature while remaining central to many of healthcare's most significant priorities. Transaction activity, regulatory developments and litigation continue to shape the legal and business landscape, underscoring the growing role home health and hospice providers play in the future of healthcare delivery.

Transactional Trends State of the Market The home health and hospice sectors continue to attract strategic and financial investment as providers assume a more central role in the healthcare delivery system. While demographic trends provide a solid foundation, transaction activity reflects much more than simple population demand; buyers are increasingly focusing their attention on organizations that demonstrate clear operational maturity, scalable platforms and a proven ability to support valuebased care initiatives. Even though higher borrowing costs and reimbursement uncertainty have created a more disciplined transaction environment, high-quality assets continue to command significant interest from investors. To navigate reimbursement pressures and evolving regulatory expectations, industry consolidation continues as providers seek greater scale. Larger, integrated platforms are often better positioned to absorb technology investments, maintain compliance infrastructure, reduce redundancy and participate in value-based reimbursement models. Consequently, buyers are looking beyond geographic expansion to clinical capabilities, referral networks, specialized service lines and operational sophistication. Complementary offerings such as homebased primary care and palliative care can further enhance platform value and support coordinated care strategies. Hospitals and health systems continue to pursue partnerships, joint ventures and acquisitions to strengthen post-acute networks, improve care transitions and reduce readmissions. As healthcare delivery continues to shift into the home, providers with established care coordination capabilities remain attractive strategic partners. Advanced technology infrastructure remains a key part of the investment thesis. During diligence, buyers increasingly evaluate digital infrastructure, remote patient monitoring, workforce management platforms, and AI-enabled documentation tools to assess scalability and efficiency. Through 2027, strategic buyers are expected to remain active as they strengthen care delivery networks and expand service offerings. Private equity (PE) investment is likely to remain selective, with greater emphasis on organizations demonstrating strong compliance, operational discipline and sustainable financial performance. Organizations that combine clinical quality, operational sophistication and scalable infrastructure are expected to remain well positioned for future investment.

Holland & Knight Representative Transactions (2025-Present) • Represented North Central Florida Hospice Inc. in its $60 million sale of assets to BrightSpring Health Services, a leading provider of home and community-based health services for complex populations • Represented St. Croix Hospice, a portfolio company of Partners Group and H.I.G. Capital, in its add-on acquisition of hospice operations in Southwest Minnesota from Mayo Clinic Health System • Represented BAYADA Home Healthcare, a leading nonprofit home healthcare provider, in its acquisition of the home health operations of Redeemer Health, a provider of high-quality, comprehensive home care. • Represented HCA Healthcare Inc., one of the nation's leading healthcare providers, in its sale of 31 home health and hospice agencies, across eight states, to Deaconess Associations Inc., an independent, notfor-profit enterprise managing a portfolio in excess of $1 billion of diversified health services, programs, investments and community grant initiatives • Represented HCS-Girling, a premier provider of home health and home care services across multiple verticals, in its add-on acquisition of Pinnacle Home Care, a leading provider of home care services in Florida • Represented Abound Health, a leading provider of home care solutions and a portfolio company of Housatonic Partners, in its add-on acquisition of Star Pediatrics, one of New Jersey's largest pediatric home health providers.

Industry Insights from Edgemont Edgemont Partners is a premier healthcare investment bank advising clients across the industry. In preparation of this report, we spoke with the firm's Managing Director Eugene Goldenberg, who works with home health and hospice clients, about transaction trends in the sector. He shared the following observations on home health and hospice mergers and acquisitions (M&A) and the key themes he's hearing in conversations with his clients:

• CMS Moratorium: On May 13, 2026, the Centers for Medicare & Medicaid Services (CMS) enacted a nationwide six-month suspension on enrolling new Medicare-certified home health agencies and hospices. The full effect is difficult to gauge as of this writing, but providers that relied on start-ups and de novo development as part of a multi-pronged growth strategy will have to pivot, at least in the interim, and re-allocate capital toward M&A. CMS has effectively turned the entire country into a Certificate of Need state, so competition for acquisitions is expected to intensify, with sellers' valuation expectations rising from already lofty levels. • Impact of Compliance and Billing on Transactions: Compliance and billing and coding practices remain the number one factor buyers assess, often before they spend any dollars on financial and operational diligence. With regulatory scrutiny increasing, a target's history of managing through the alphabet soup of audits, including Supplemental Medical Review Contractor (SMRC) reviews, is examined under a microscope. • PE Pressure to Return Capital: Many PE sponsors bought platforms five to seven years ago and are facing intense limited partner (LP) pressure to return capital, creating a strong pipeline of sizeable platforms waiting for the right time to come to market. Some have grown to more than $50 million, $100 million and even $200 million of earnings before interest, taxes, depreciation and amortization (EBITDA) under PE ownership, and the buyer universe for assets of this scale is inevitably much smaller. Some of these assets have grown to such a scale that they somewhat painted themselves into a corner, where an initial public offering or a PE consortium may be the only viable option for an exit. • Drivers of Valuations: There are a number of factors that collectively drive valuation in this space: 1) a clean compliance history, 2) a strong same-store and organic growth profile, 3) a proven multi-pronged growth strategy, 4) clinician retention and turnover trends, 5) geographic footprint and market density, and 6) the strength and depth of the management team. Generally, there continues to be an imbalance between supply and demand of well-built and managed post-acute care companies. PE is sitting on record dry powder and often willing to pay up for "class A" assets, while sellers continue to wait for the right window. • Impact of Labor on Growth: Labor shortages and nurse burnout continue to strain organic growth and depress operating margins across homebased care. Whoever has the clinicians wins. Demand is not the question; growth is constrained by the lack of caregivers. Turnover, retention, staffing ratios and clinician satisfaction are some of the biggest diligence areas for prospective investors as labor is by far the largest expense line item for these businesses. Everyone is competing for the same talent, so buyers are often willing to pay a premium for assets with a differentiated recruiting and retention strategy. • Home Health Transaction Activity Expected: Hospice has been at the forefront of post-acute care M&A for several years, but a more favorable than expected home health proposed rule from CMS in July 2026, combined with the nationwide moratorium on new licenses, should drive elevated transaction activity. Investors are beaming increasingly more comfortable deploying capital in a sector that has been viewed as a contrarian play for the last few years.

Regulatory Trends Given the growth of the home health and hospice industries, their dependence on federal reimbursement and the complicated needs of patients, operators in these sectors must follow a complex web of regulatory and compliance considerations. Key areas of regulatory consideration for home health and hospice providers include reimbursement and payment policy, hospice, palliative care and program integrity, Medicare Advantage and Value-Based Care, technology, privacy and cybersecurity, as well as state regulatory developments.

Reimbursement and Payment Policy Home Health Reimbursement CMS is pursuing significant changes across Medicare payment systems that could affect provider reimbursement, operating models, technology investments and the broader shift toward value-based care. For home-based and post-acute care providers, the calendar year (CY) 2027 rulemaking cycle reflects the balance between annual payment updates and policies to recoup prior payments, recalibrate reimbursement, strengthen program integrity and more closely tie payment to quality and utilization. On July 1, 2026, CMS released the CY 2027 Home Health Prospective Payment System proposed rule for HHAs. CMS proposes a 2.1 percent payment update for agencies that meet quality reporting requirements. Combined with an adjustment to outlier payments, CMS estimates that aggregate Medicare payments to home health agencies would increase by approximately $420 million, or 2.4 percent, compared with CY 2026. CMS is also proposing a one-year 3.0 percent reduction to the national standardized 30-day payment rate to recoup historical Patient-Driven Groupings Model (PDGM) overpayments. CMS estimates that approximately $4.9 billion in cumulative temporary adjustments remain through CY 2025 and projects that the proposed CY 2027 adjustment would recoup approximately $500 million. While CMS is not proposing an additional permanent PDGM adjustment for CY 2027, the temporary reduction would continue to create reimbursement pressure for home health agencies. CMS is also proposing its annual recalibration of PDGM case-mix weights, functional impairment levels, comorbidity adjustments, and Low-Utilization Payment Adjustment (LUPA) thresholds using more recent utilization and claims data. These changes can affect reimbursement at the patient and episode level even when overall payment updates appear positive, making patient mix and acuity increasingly important to financial performance. As of June 2026, more than half of Medicare-eligible beneficiaries were enrolled in Medicare Advantage plans. Medicare Advantage has supported growth in home health by increasing demand for services that reduce readmissions and manage chronic conditions. Hospice also continued to grow in 2025, with admissions increasing and the share of Medicare deaths occurring on hospice surpassing 51 percent. Demonstrating total-cost-of-care value to Medicare Advantage plans is shaping the hospice and skilled home health sectors.

Value-Based Payments Value-based care is now the operating environment for post-acute providers. To succeed under these arrangements, providers are investing in technology, AI, and data analytics to improve outcomes and quality of care. CMS continues to align reimbursement with quality and outcomes. The nationwide expanded Home Health Value-Based Purchasing (HHVBP) Model can adjust an agency's Medicare payments by as much as 5 percent based on performance on selected quality measures. CMS is not proposing substantive changes to the model itself for CY 2027, but it is proposing greater alignment between HHVBP and the Home Health Quality Reporting Program, including measure sets, reporting periods, performance reports, appeals processes and scoring methodologies. For providers, this reinforces the importance of investing in quality infrastructure, data collection, reporting and performance management. Over time, reimbursement will increasingly depend on providers' ability to demonstrate measurable outcomes in addition to furnishing covered services. CMS' new Long-term Enhanced ACO Design (LEAD) Model, launching January 1, 2027, is a voluntary 10-year initiative focused on high-needs populations, including dual-eligible beneficiaries and individuals with multiple chronic conditions. The model gives Accountable Care Organizations (ACOs) long-term financial accountability for cost and quality performance while allowing post-acute providers, including home health agencies, to participate as "Preferred Providers" whose utilization and costs are incorporated into the ACO's performance. LEAD also creates new opportunities for post-acute providers to engage in episode-based risk-sharing arrangements through CMS-administered contracts, including initiatives focused on falls prevention and care coordination. Enhanced beneficiary incentives and future ACO-Medicaid partnerships may further strengthen the role of home health and other postacute providers in managing care, reducing costs and improving outcomes. Another significant CMS model impacting post-acute providers is the Transforming Episode Accountability Model, which launched January 1, 2026 as a mandatory five-year program. More than 700 acute care hospitals across 45 states are now accountable for the full cost and quality of 30-day surgical episodes, including everything that happens in post-acute care after discharge. When a hospital owns that 30-day episode, its home health agency partners become instruments of its financial performance. In the commercial market, post-acute providers have seen growth in their participation in value-based care arrangements over the last few years. These arrangements include episode-based bundles through which the payer sets a single target price for an entire care episode, including post-acute care which allows home health agencies to share in the savings to shared savings, upside and downside risk and capitated or sub-capitated arrangements. Additionally, high performing agencies are increasingly becoming part of preferred or narrow networks.

Remote Patient Monitoring and Technology-Enabled Care The CY 2027 Medicare Physician Fee Schedule proposed rule could significantly reshape the remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) landscape. CMS proposes requiring clinical staff furnishing billable RPM and RTM services to be direct employees of the billing practitioner or practice, effectively eliminating reliance on third-party contracted clinical personnel for Medicare billing purposes. While providers could continue using external technology vendors, organizations that currently outsource both technology and clinical monitoring functions may need to restructure programs, bring staffing in-house or reevaluate vendor relationships. CMS also proposes to reduce reimbursement for several RPM and RTM services by revising practice-expense inputs and eliminating certain treatment-management expenses. In addition, CMS would require an initiating face-to-face visit for RPM and RTM and extend RTM billing to established patients only. CMS is also considering replacing the current RPM and RTM code set with four bundled G-codes, which could further alter reimbursement and operational requirements. Collectively, these proposals could increase administrative and staffing costs while reducing reimbursement, potentially affecting the economics of remote monitoring programs. Providers should evaluate the impact on technology partnerships, workforce models and long-term digital health investments, particularly in rural and geographically dispersed settings where remote monitoring has become an important tool for care management and coordination.

Strategic Implications for the Sector Changes in Medicare reimbursement and the continued shift toward value-based and risk-based care are reshaping strategic priorities for home health and hospice providers. While annual payment updates remain important, providers are increasingly focused on improving outcomes and managing total cost of care, as reimbursement is also affected by behavioral adjustments, case-mix recalibration, quality performance measures and changes to specific service payments. For home health agencies, ongoing PDGM implementation and reconciliation create uncertainty regarding reimbursement adequacy and long-term financial planning. In response, providers are investing in data infrastructure, outcomes reporting, care coordination and risk stratification capabilities. Clinical outcomes have become both a quality and business metric, driving investments in staff training, technology and AI tools that support quality improvement and operational efficiency. Providers are also integrating social determinants of health into care planning, coordinating care transitions and aligning quality programs with payer and CMS performance measures. Organizations are seeking to streamline operations and protect clinician time by leveraging technologies such as ambient documentation and other AI-enabled solutions that reduce administrative burdens. Recent Medicare proposals affecting RPM, RTM and other technology-enabled services demonstrate how payment and regulatory changes can quickly influence the viability of emerging care models and technology investments. As Medicare Advantage enrollment and alternative payment models continue to expand, successful home health and hospice providers are increasingly engaging payers as strategic partners rather than merely contract counterparties. They are proactively demonstrating their ability to reduce avoidable hospitalizations, manage complex patients across care settings, improve quality outcomes and provide high-quality end-of-life care. Accordingly, providers and investors should evaluate reimbursement changes not only through the lens of annual payment updates, but also for their impact on patient mix, staffing, technology strategies, quality infrastructure, care coordination capabilities, payer relationships and long-term investment decisions.

Hospice, Palliative Care and Program Integrity Program integrity within the home health and hospice sectors has shifted toward an aggressive, data-driven enforcement model spearheaded by CMS. To combat fraud, waste and abuse, federal authorities have deployed unprecedented measures – nationwide provider enrollment moratoria, high-risk screening protocols with mandatory fingerprinting and restrictions like the 36-month rule barring transfers of Medicare billing privileges during majority ownership changes. Advanced data analytics, including the Hospice-Selected Vulnerability Index, flag billing outliers and unusual utilization in real time, feeding directly into enforcement actions. CMS has also significantly expanded unannounced site visits as a frontline integrity tool. CMS may conduct onsite reviews at any time to verify enrollment accuracy and compliance. All prospective HHAs and hospices – classified as "high" categorical risk – face mandatory site visits during screening. The February 2026 Comprehensive Regulations to Uncover Suspicious Healthcare Request for Information signals CMS' intent to further strengthen these authorities. CMS has simultaneously ramped up enrollment suspensions and revocations for what often amount to technical deficiencies. Under current regulations, CMS may revoke enrollment for noncompliance with any Title 42 requirement – including failures to report changes on time, provide requested documentation or submit fingerprints within 30 days. Enrollment can likewise be denied where an HHA cannot verify initial reserve operating funds within 30 days of a request. These actions – triggered by what providers often view as minor administrative lapses – carry re-enrollment bars of up to three years and reflect a zero-tolerance posture. Post-payment audits have likewise intensified, with Medicare increasingly clawing back previously paid claims. CMS Fraud Defense Operations Center, formed in 2025, has further accelerated payment suspensions – generating $1.8 billion in savings in its first year alone. Extrapolated overpayment demands can far exceed the value of individually denied claims, creating significant financial exposure for providers. Underpinning all of this is the U.S. Department of Health and Human Services' (HHS) growing use of cross-agency tools to detect fraud through state-federal collaboration. CMS Center for Program Integrity bridges collaboration with HHSOffice of Inspector General (OIG), U.S. Department of Justice (DOJ) and State Medicaid Fraud Control Units, including through the Health Care Fraud Prevention and Enforcement Action Team Task Force – a joint HHS/DOJ initiative deploying interagency strike teams against emerging fraud schemes. State Medicaid Fraud Control Units are also required to maintain formal working relationships with federal prosecutors and refer cases exceeding their authority to OIG or DOJ. The result is that fraud detection is no longer siloed within individual programs – it leverages shared intelligence across every level of government. This regulatory crackdown is mirrored in U.S. Congress through bipartisan legislative efforts, such as the Protecting Seniors and Stopping Fraudsters Act, which aims to increase survey frequencies and enhance beneficiary notifications. While these initiatives protect public funds and patient safety, they also introduce operational headwinds for legitimate providers. Industry advocates caution that sweeping measures, like broad enrollment freezes, could inadvertently restrict patient access to care and complicate M&As. Moving forward, providers must prioritize rigorous internal compliance programs and proactive auditing to navigate this climate of heightened scrutiny and steeper financial penalties.

Technology, Privacy and Cybersecurity Like other healthcare providers, the home health and hospice industry faces growing data privacy and security concerns with respect to protecting patient data. State and federal regulations can vary widely. For example, home health agencies in Florida that comply with the federal Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule are generally in compliance with state law. Hospices, however, are subject to state laws that are more stringent than HIPAA, and must obtain patient authorization for many types of routine uses and disclosures of protected health information (PHI). Home medical equipment providers must obtain patient authorizations for most uses other than treatment. Electronic PHI is subject to particular threats and vulnerabilities. A number of recent trends should be examined and addressed by these industry segments:

Expanded Use of AI, Remote Patient Monitoring and Digital Care Coordination AI, remote patient monitoring tools and other digital health solutions have become ubiquitous in all care settings. With the expanding use of these tools comes increasing questions about treatment efficacy. For example, despite the promise and convenience that AI tools can offer, current iterations come with risk of hallucinations, bias and other inaccuracies that can lead to adverse care outcomes. Ambient listening tools that can be used in inpatient hospice care settings can take notes regarding patient encounters, freeing physicians and nurses to give more attention to their human interactions with the patient. Digital health tools, such as AI recording, can come with privacy risks, particularly in states where all parties to a recorded conversation must consent to the recording. Implementation of digital health tools requires careful analysis of potential privacy and quality risks, as well as implementation of AI governance and other measures to reduce those risks.

Marketing, Websites and Tracking Technologies Since the advent of the HIPAA Privacy Rule in 2000, internet protocol (IP) address numbers have been considered to be identifiers that would have to be removed from limited and de-identified data sets in order for the information to avoid certain HIPAA restrictions. With increasing competition for patients, hospice and home health providers are looking for ways to market their services and also analyze the individuals who are coming to their websites. Use of tracking tools on websites, such as pixels, cookies and web beacons, can create significant potential privacy concerns. For example, if an individual visits a page and inputs identifiers that authenticate their identity, and their IP address is transferred to a third party, such as Meta or Google, along with other information related to their healthcare, that data transmission can implicate state and federal privacy rules. Numerous plaintiff class action suits have been filed against providers alleging privacy violations relating to the use of these common marketing tools.

Increasing Breach Risks Hospices and home health agencies need to conduct accurate and thorough risk analyses to identify threats to PHI. A use or disclosure of PHI in a manner not permitted by HIPAA is presumed to be a breach, with limited exceptions. Notices to affected individuals, HHS and, in some cases, the media, must be provided unless a covered entity or business associate can provide a documented risk assessment indicating that there is a low probability that the PHI was compromised. Significant breaches can trigger plaintiff class action lawsuits and regulatory enforcement actions. Many states have their own breach notification laws. Hospices and home health agencies must develop measures to mitigate those risks, and should implement robust privacy and security measures, including policies and procedures, administrative, technical and physical security protections, as well as workforce training.

State Regulatory Developments Home health agencies and hospices must navigate state licensing and regulatory requirements that vary significantly by jurisdiction. Licensure requires home care and hospice providers to meet regulations addressing staffing, plans of care, proof of financial viability and quality of care. States have developed differing regulatory and licensing frameworks for home care and hospices in recent years including both a trend towards differentiating between medical and non-clinical homebased services, scope of practice, as well as increasing staffing and staff training requirements. More than 15 states have certificate of need (CON) laws that require home health agencies and/or hospices to obtain a CON prior to licensure and often in conjunction with a change of ownership or change in service offerings. State licensure requirements, corporate practice of medicine considerations and evolving home based care regulations continue to shape market expansion and transaction strategies. CON licensure and Medicare and Medicaid change of ownership requirements often influence whether transactions are structured as an asset or equity transaction. In some states, equity transactions will not result in as onerous a licensure and CON process as required for an asset transaction. Additionally, as more care is provided in the home by physicians, advanced nurse practitioners, physician assistants and paramedics, states continue to focus on scope of practice of various practitioner types and the distinction between a house call medical practice and home health agencies. States are also beginning to regulate community paramedics as their role expands into hospital-at-home programs and post-discharge services.

In addition to increased regulations of home-based providers, states are increasingly focused on advancing and regulating palliative care programs although the approaches vary widely. Palliative care is generally defined as treatment directed at controlling pain, relieving symptoms and focusing on the special needs of patients and family including stress relief for patients experiencing a serious illness. The goal is to improve quality of life for both the patient and the family, and it can be given alongside curative treatment at any stage of an illness. This differentiates palliative care from hospice. Moreover, a number of states have introduced legislation to regulate and support palliative care in the last year. This is a growing area of home-based care that focuses not on end-of-life care but on palliative care in any serious illness whether terminal or chronic. Along with recent state laws and revisions regarding scope of practice, licensure, CONs and palliative care, many states are changing their Medicaid reimbursement and enrollment practices spurred in part by federal changes. There is a continuing shift in most states to Medicaid managed care as well as to decreasing or new reimbursement methodologies. As states continue advancing palliative care initiatives, Medicaid reimbursement policies, scope-of-practice requirements and other home-based care regulations, it creates an increasingly fragmented compliance landscape for multi-state providers.

Litigation Trends Home health and hospice providers continue to face a complex litigation environment shaped by heightened government scrutiny, reimbursement pressures and persistent workforce challenges. As the sector grows and care delivery models become more complex, providers are navigating disputes involving government enforcement and False Claims Act (FCA) allegations, payer coverage and reimbursement practices, and employment and workforce issues. These risks underscore the importance of strong compliance practices, careful management of payer relationships and proactive strategies for addressing workforce-related legal exposure.

False Claims Act and Government Enforcement Home health and hospice providers have long been prime targets for healthcare fraud investigations, particularly FCA investigations brought by the DOJ, often initiated by private whistleblowers. While some areas of enforcement have withered significantly in the past several years (think Foreign Corrupt Practices Act and securities fraud enforcement), FCA enforcement has increased significantly in line with the Trump Administration's focus on cutting fraud, waste and abuse, supercharged early on by the Department of Government Efficiency initiative and now formalized in the Anti-Fraud Task Force led by Vice President JD Vance. Home health and hospice, with their low barriers to entry (compared to, for example, opening a hospital), can attract unscrupulous operators. But well-run and compliant companies tend to get caught in the wide net, with the federal government exhibiting suspicion of anything related to home health and hospice, as evidenced by the recent six-month moratoria on Medicare enrollment for hospice and home health agencies. Home health and hospice providers in Arizona, California, Georgia, Ohio, Nevada and Texas have been singled out by the federal government for even higher investigative scrutiny. Although FCA investigations of home health and hospice companies have increased in recent years, the theories of liability remain the same – hospice cases typically focus on hospice eligibility, home health cases often focus on homebound status and skilled need, and both home health and hospice FCA cases focus on alleged physician kickbacks and marketing practices. Examples of recent government enforcement actions involving home health and hospice include: • In January 2026, a Texas-based home health company paid $34 million to settle FCA claims brought by the DOJ. The DOJ alleged that the company billed Medicare for medically unnecessary services (patients not homebound and/or no skilled need). The DOJ also alleged that the company paid kickbacks to physician medical directors in exchange for referrals. • In October 2025, a Georgia-based hospice company paid $1.75 million to settle FCA claims that it billed Medicare for hospice services provided to ineligible beneficiaries – patients who did not have a terminal prognosis of six months or less. DOJ also alleged that the hospice provider paid kickbacks to a referring physician who served as a back-up medical director but did not actually provide services. • In April 2026, numerous California-based hospice owners and operators were criminally charged in federal court on allegations that they billed Medicare for ineligible hospice patients and paid kickbacks to marketers for patient referrals. According to the DOJ, some of the hospices involved had live discharge rates of 75 or 85 percent (national average is 17 percent). Home health and hospice companies also face increased scrutiny from CMS contractor audits, including audits by Unified Program Integrity Contractors (UPIC) and Supplemental Medical Review Contractors (SMRC). These UPIC and SMRC audits target fraud, are driven by data mining (now supercharged by AI), and can have devastating consequences for home health and hospice providers. These consequences include audits resulting in extrapolated overpayments that can run in the millions or even tens of millions of dollars, Medicare payment suspensions and even revocation of Medicare enrollment. UPICs have been particularly aggressive recently in targeting hospices with patients on long stays, which can be common for patients suffering from chronic obstructive pulmonary disease or Alzheimer's, which often involve downward trajectories that are not linear but still clinically qualify as terminal. No matter how well run and compliant, all home health and hospice agencies are currently in the government's crosshairs. Providers must remain vigilant when interacting with CMS auditors and pay careful attention to their documentation, particularly certifications and recertifications. 12

Payer Disputes As home health and hospice providers become increasingly dependent on governmental payers such as Medicare Advantage and U.S. Department of Veterans Affairs' Community Care Network, as well as commercial payer relationships, disputes over coverage and reimbursement are becoming an increasingly important area of litigation risk. Providers may face disagreements involving medical necessity determinations, prior authorization requirements, claims denials, reimbursement rates and methodologies, as well as differing interpretations of contractual and coverage obligations. Home health providers can also expect to see an increase in audits and Special Investigations Unit oversight, consistent with the focused attention on fraud, waste and abuse. Commonly, compliant providers may find themselves caught up in these sorts of initiatives. For home health providers, disputes can arise over whether patients satisfy applicable coverage criteria, whether the frequency or duration of services is medically necessary, and whether services were properly authorized. Hospice providers may similarly encounter disputes involving eligibility and coverage determinations, as well as responsibility for payment for services furnished to hospice patients. In both sectors, increasingly complex payer requirements can create significant administrative burdens and opportunities for disagreement over whether services are covered and properly reimbursable. Providers are also scrutinizing patterns of delayed payment, underpayment and claims denials more closely. Although an individual claim may involve a relatively modest amount, recurring denials or reimbursement practices applied across a large patient population can create significant financial exposure. Disputes that cannot be resolved through administrative appeals or payer negotiations may ultimately lead providers to pursue contractual remedies, arbitration or litigation. Additionally, retrospective audits can seek "overpayments" for any perceived deficiencies in documentation or focused on any anomalies in record keeping or billing. These isolated instances can lead to significant issues from overpayment and recoupment efforts to terminations of in-network status. Against this backdrop, home health and hospice organizations should closely monitor payer behavior and claims data to identify recurring denial and payment trends, while maintaining documentation supporting coverage, medical necessity and compliance with authorization requirements. Providers should also focus on any audit notices, as well as understand the dispute resolution provisions in their payer contracts and evaluate whether recurring reimbursement issues reflect isolated claims disputes or broader practices that may warrant escalation.

Employment and Workforce Litigation Labor and employment issues remain a significant challenge for home health and hospice providers in 2026. Workforce shortages, rising labor costs, evolving employment regulations and increased government scrutiny are creating significant compliance and litigation challenges across the industry. As providers compete for scarce clinical talent while managing reimbursement pressures, workforce-related legal issues remain a key area of concern and legal risk. One of the most significant areas of concern is employment litigation arising from recruitment and retention practices. Persistent shortages of nurses, therapists, aides, social workers and other clinicians have led some employers to adopt aggressive hiring and retention strategies, including restrictive covenants, repayment provisions tied to sign-on bonuses and other contractual mechanisms designed to discourage employee departures. These arrangements continue to face heightened scrutiny from state regulators and remain a source of litigation risk for healthcare employers, particularly those with multi-state operations who seek a "one size fits all" approach across their enterprise. Wage and hour compliance also remains a major concern. Home health and hospice providers frequently employ workers in decentralized care settings where tracking compensable time can be challenging. Claims involving unpaid overtime, "off-the-clock" work, travel time, missed or "automatically deducted" meal periods, documentation completed outside scheduled shifts and employee misclassification continue to generate litigation across the healthcare industry. Labor shortages can exacerbate these risks by increasing workload demands and creating pressure for clinicians to perform administrative tasks outside regular work hours. And the fact that these claims most often arise in the context of class or collective actions involving hundreds if not thousands of employees and the claims are not typically covered by employment practices liability insurance policies raises the stakes even higher. 13

Healthcare employers are also facing increased scrutiny regarding worker classification and contingent workforce arrangements. Many organizations rely on contract clinicians, staffing agencies, per diem personnel and other flexible staffing models to address workforce shortages. Misclassification of workers as independent contractors rather than employees can create exposure under federal and state wage-and-hour laws, tax regulations and employee benefit requirements. As agencies continue exploring alternative staffing solutions, compliance with worker classification standards remains a critical legal consideration. And, for those providers who recruit internationally, an increasing trend of lawsuits claiming violations of the Trafficking Victims Protection Act is also concerning. A related issue involves labor shortages' impact on quality, compliance and FCA exposure. Staffing shortages can make it more difficult for providers to meet clinical documentation requirements, care delivery obligations and Medicare conditions of participation. When workforce constraints contribute to documentation deficiencies, missed visits or questions regarding the adequacy of services provided, organizations may face scrutiny from regulators and enforcement agencies. Government enforcement priorities continue to focus on medical necessity, documentation, billing practices and hospice eligibility determinations, making workforce management an important compliance consideration. Union activity and labor relations issues may also increase as workforce pressures persist. Rising workloads, burnout and compensation concerns can contribute to employee organizing efforts. Providers must navigate the requirements of federal labor law while responding to employee concerns regarding compensation, scheduling flexibility, staffing levels and workplace conditions. Though the National Labor Relations Board has made a dramatic shift in focus from the prior administration, healthcare employers should be mindful that efforts to restrict employee communications regarding compensation or working conditions may create additional legal risk. Another emerging issue involves the use of technology, AI-enabled documentation tools and workforce management platforms. While these technologies may improve clinician efficiency and reduce administrative burden, they also introduce potential legal considerations involving recruiting, privacy, data governance, monitoring of employees and compliance with workforce-related regulations. Providers increasingly must evaluate workforce technology through both an operational and legal compliance lens. Finally, demographic changes within the healthcare workforce are creating additional employment law considerations. An aging clinical workforce, coupled with increasing retirements, may lead to more disputes involving disability accommodations, fitness-for-duty evaluations, age discrimination claims and succession planning challenges. Healthcare employers are also confronting increased competition for talent at a time when workforce supply remains constrained. In 2026, workforce issues in home health and hospice are no longer solely operational concerns. They increasingly intersect with employment law, regulatory compliance, government enforcement and litigation risk. Providers that maintain robust workforce compliance programs, regularly review employment practices, carefully structure recruitment and retention strategies and proactively address wage-and-hour and staffing issues will be better positioned to manage risk while continuing to meet growing demand for home-based care services.

Strategic Outlook for 2027 Looking ahead, home health and hospice providers will continue to operate at the center of healthcare's shift toward lower-cost, patientcentered and home-based care. Demand for services remains strong, but success in this environment will require more than scale alone. Providers and investors will need to balance growth opportunities with disciplined compliance practices, sophisticated reimbursement strategies, thoughtful technology adoption and proactive workforce planning. Organizations that can demonstrate clinical quality, operational resilience, strong payer relationships and a mature approach to regulatory and litigation risk will be best positioned to navigate market uncertainty and capitalize on the continued evolution of home-based care.

Authors John Devine Partner | Philadelphia Corporate, M&A and Securities (CMAS)

Miranda A. Franco Senior Policy Advisor | Washington, D.C. Government

Shannon Britton Hartsfield Partner | Tallahassee Litigation

Sandra L. Heller Partner | West Palm Beach Litigation

Juliet M. McBride Partner | Houston Healthcare

Mark W. Peters Partner | Nashville Litigation

Jennifer Rangel Partner | Austin Healthcare

Jennifer Weaver Partner | Nashville Healthcare

Nili S. Yolin Partner | New York Healthcare