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Publicly traded home-based care providers have not shied away from addressing some of the concerns facing their industry. From Medicaid budget cuts to the Medicare home health payment rule, companies have outlined some of the pressures that beset the industry.
Their Q3 earnings calls, however, paint a picture of one way home-based care providers will succeed: through their legislative agendas that yield meaningful Medicaid rate increases. With expectations that rate wins will continue into 2026, publicly traded companies’ Medicaid success may offer hope for Medicaid-accepting home-based care providers across the industry.
Earnings calls also demonstrated that providers have not stopped dealmaking despite some industry pressures. Addus HomeCare Corporation (Nasdaq: ADUS) spent $7.4 million to acquire the personal care operations of Alice, Texas-based Del Cielo Home Care Services in October. Aveanna Healthcare (Nasdaq: AVAH), BrightSpring Health Services (Nasdaq: BTSG) and the Pennant Group Inc. (Nasdaq: PNTG) are all buttoning up or integrating acquisitions completed this year.
As 2025 winds to a close, the most recent batch of home-based care earnings calls shows that the largest home-based care providers are finding success and will continue to grow – and demonstrate that there is reason for optimism for providers in the industry.
In this week’s exclusive, members-only HHCN+ Update, I’ll share my take on Q3 earnings calls and offer analysis and key takeaways, including:
– Why Medicaid reimbursement rate increases are possible
– That home-based care M&A continues despite headwinds
– Why dealmaking in 2026 will mirror Q3 of 2025
Reimbursement rate wins show Medicaid silver lining
At a time when rate pressures abound, it can be easy to feel like there is no hope in sight for providers operating on thin margins. But Q3 earnings calls revealed that providers are successfully negotiating some rate increases.
Both Addus and Aveanna highlighted notable bumps to Medicaid rates in Q3.
Aveanna announced that it notched 10 Medicaid rate wins in 2025, which it said was in line with the company’s expectations. CEO Jeff Shaner said that he anticipated a similar volume of rate increases in 2026, but that they would be smaller than those in 2025.
“As we reset our legislative goals for 2026, we’ll probably still set a goal of it being double-digit rate wins,” Shaner said. “We do expect those [private duty services] (PDS) rate wins to be generally smaller than they’ve been over the course of the last two and a half years. The great part is we’re prepared for that.”
In 2026, Shaner said he estimates that rate increases will be closer to the range of 2% to 3%.
On its earnings call, Addus’ leaders drew attention to its rate increases for personal care services in Texas and Illinois, which Allison attributed to payers’ recognition of personal care services’ ability to reduce overall costs of care. The company estimates these rate increases to be worth $35 million.
With dramatic cuts to the federal Medicaid budget, states are renegotiating priorities, putting home-based services at risk. For Medicaid home health providers to protect access to these services, negotiations for rate increases are more important than ever.
Aveanna’s and Addus’ rate wins demonstrate that hope exists for providers able to prioritize their legislative agendas and push for improved rates. This is key for parts of home-based care operations beyond margins. Aveanna leadership said the company was optimistic about its ability to attract caregivers in areas where it achieved acceptable rate increases. With examples of these wins, home-based care providers accepting Medicaid can have some additional hope – though they should keep in mind that Aveanna is expecting slimmer increases in 2026.
Providers polish off deals, expect more
Several publicly-traded home-based care companies have closed, or plan to do so soon, high-profile deals.
On its earnings call, Addus highlighted its acquisition of the personal care operations of Alice, Texas-based Del Cielo Home Care Services on Oct. 1, a $7.4 million deal.
BrightSpring’s CEO said that the company plans to finalize its purchase of home health and hospice assets divested as part of UnitedHealth Group’s (NYSE: UNH) acquisition of Amedisys in Q4, and expects the deal to be accretive to 2026.
Pennant has closed its acquisition of assets divested as part of the UnitedHealth/Amedisys deal and is now looking to begin to reap the benefits of its expanded footprint.
“The United, Amedisys process created a unique opportunity to add high-quality assets in desirable markets at an attractive valuation, rarely seen on larger deals with sophisticated operators,” Brent Guerisoli, CEO of Pennant, said on the company’s Q3 earnings call. “As we’ve closed the transaction and dived into the businesses, our excitement has only grown.”
Aveanna leaders said the company was on track to completely integrate its most recent acquisition, the Thrive Skilled Pediatric Care deal, by the end of the year. The company’s leadership said it plans to complete more deals like this one in 2026.
With a distinct possibility of a dramatic rate cut for Medicare home health, potential acquirers are concerned about home health deals, according to Mertz Taggart. Even if the final rule includes a rate cut softer than many have anticipated, I think the period of uncertainty in 2025 will add to the caution of growth-minded providers and dampen home health dealmaking overall. Still, the largest home-based care companies can absorb more rate pressure than smaller organizations, so earnings calls in 2026 are likely to continue to include news of acquisitions and integrations. More deals like Addus’ acquisition of Del Cielo Home Care Services are almost certainly like to continue, as personal care services organizations continue to attract investor interest. These trends suggest Q3 is likely to set the standard for dealmaking for quarters to come.
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