Providers strive to diversify services, payment streams

Share this article:
Post-acute providers want multiple payers, says Justin Fengler.
Post-acute providers want multiple payers, says Justin Fengler.

Companies in the post-acute sector have been seeking deals to diversify their services and limit their reliance on Medicare, according to a recent analysis from investment banking firm TripleTree.

Last year's $409 million Gentiva acquisition of Harden Healthcare illustrates the trend of providers limiting Medicare exposures, according to the analysis from TripleTree Associate Justin Fengler. The merger “significantly diversified” Gentiva's payer mix by increasing its share of Medicaid and private pay dollars, Fengler wrote. 

Deals such as this are not surprising, considering Medicare rates have been consistently threatened in recent years, Fengler told McKnight's.

Gentiva provides home health and hospice services nationwide. It acquired Harden's home health, hospice and community care businesses, but not its long-term care facilities. A shift away from traditional nursing homes was reflected in other deals.

Kindred Healthcare, for example, is scaling up services such as rehabilitation while shrinking its skilled nursing facilities. The seven acquisitions Kindred made in 2013 were designed to shield it from risks “associated with any one setting,” according to Fengler.

“Several large players” are pursuing similar strategies, he wrote. 

Deals initiated by payers have focused on those eligible both for Medicare and Medicaid, according to the analysis. To better serve this group, payers acquired providers and care coordination companies in 2013. 

These trends are likely to continue, Fengler told
McKnight's. Care management and coordination in particular will continue to be a priority, to the advantage of standalone coordinators or providers that are “especially strong in the area,” he said. Companies also might focus more on integrating behavioral health and physical health offerings, he predicted. 


Share this article:
close

Next Article in News

More in News

Bulk of Medicaid to be managed care in two years: Avalere

Bulk of Medicaid to be managed care in ...

More than three-quarters of Medicaid beneficiaries will be enrolled in a managed care plan as of 2016, according to an Avalere Health analysis released Thursday. The numbers reveal that managed ...

Nursing home asked for employee's personal information too often, jury rules

The human resources department of a Maine nursing home did not properly protect a former employee's personal identification information, a jury recently ruled.

Test could confirm sepsis within an hour

Nursing home residents might benefit from a new way of diagnosing and treating sepsis made possible by discoveries out of the University of British Columbia.