Experience with home health agencies in NYC

October 22, 2023

by a professional from Emory University in Atlanta, GA, USA

Does anyone have any experience with acquiring home health agencies in NY/NYC? Looking at a potential deal but I’m seeing mixed reviews on the process regarding transfer of licenses, red tape, etc.

Anyone with experience in this space, I’d love to hear your experiences with this.

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Reply by a searcher
from Virginia Polytechnic Institute and State University (Virginia Tech) in Blacksburg, VA, USA

A great deal. I would strongly discourage you from this path. As of today - and for many years now - NYS maintains a de facto moratorium on LHCSA transfers. Your only path is to set up a management agreement with the seller, which isn't that hard, but creates a lot of weirdness. There seems to be little prospect for this to change in the near future, so expect that you'd have to have that arrangement in place for the long haul. In addition, NYS is actively trying to decrease the number of LHCSA licenses, so they've stepped up the regulatory burden significantly, and they've stepped up audits and enforcement actions. Ostensibly this is for the good of the people, but it's rent-seeking pushed by larger agencies, pure & simple. They also are doing things like targeted minimum wage increases specific to the industry, which will significantly erode margins. You really don't want to go down this path.

Reply by an intermediary
from University of Richmond in Richmond, VA, USA

Appreciate the tag ^redacted‌. I can't speak to NY/NYC market but a majority of the transactions in VA/MD are stock sales to maintain relationships and transition licenses, contracts, clients, caregivers, and more to ensure continuity with gov't agencies, insurance companies, vendors, etc. A buyer needs to conduct a thorough due diligence and obtain appropriate indemnification from seller for safeguarding the business against possible future claims.

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