Post-acute providers are merging to reduce Medicare exposure and expand their menu of services, market analyst says

Share this article:

Post-acute providers are seeking deals that diversify their services and limit financial exposure related to Medicare reimbursement rates, according to an analysis from investment banking firm Triple Tree.

The $409 million Gentiva acquisition of Harden Healthcare illustrates the trend of limiting Medicare exposures “in the face of increased reimbursement pressures,” according to the analysis from Triple Tree Associate Justin Fengler. The merger “significantly diversified” Gentiva's payer mix by increasing its share of Medicaid and private pay dollars, Fengler wrote.

“Several large players” are pursuing strategies similar to Kindred Healthcare, which has moved aggressively to expand across the whole post-acute continuum, according to Fengler. The seven acquisitions Kindred made in 2013 were designed to shield it from risks “associated with any one setting,” he wrote. In particular, Kindred is scaling up its higher-margin services such as rehabilitation while shrinking its footprint in the skilled nursing sector.

Deals initiated by payers have focused on enhancing their ability to serve those dually eligible for Medicare and Medicaid, according to the analysis. To do so, payers acquired providers and care coordination companies in 2013. Examples include Humana's acquisition of American Eldercare and Centene's acquisition of U.S. Medical Management.

Click here to access the complete analysis, posted Monday.

Share this article:

More in News

'Minor' issues at the nursing home can cause disastrous care transitions, expert warns

'Minor' issues at the nursing home can cause ...

What may appear to be minor administrative problems in a nursing home - a fax machine locked away at night or no one designated to copy paperwork - can cause ...

Long-term care facilities approach 80% worker flu vaccination rate after handing power ...

Fourteen long-term care facilities in Pennsylvania dramatically increased their staff flu vaccination rate by having a regional pharmacy take over the process, according to a report issued Thursday by the Agency for Healthcare Quality and Research (AHQR).

RACs were 'most improved' healthcare auditors for getting back money in 2013, ...

Medicare Recovery Audit Contractors dramatically stepped up their overpayment recoveries last year, returning nearly $487 million more to the government than they did in 2012, according to a new report from a federal watchdog agency.