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

Involving nursing assistants with decisions may result in higher quality, study finds

Empowering nursing assistants and family members of nursing home residents in decision-making results improved service, a new study finds.

Also in the news for July 28, 2014 . . .

Nursing home aide accused of choking a resident....Monitoring pulse after stroke may prevent another stroke...Slow walking speed may predict dementia

Site-neutral payments likely to move forward, experts believe

Site-neutral payments likely to move forward, experts believe

As the Centers for Medicare & Medicaid Services and the Medicare Payment Advisory Commission evaluate site-neutral payments, a new brief from Health Affairs and the Robert Wood Johnson Foundation explores ...