The home health M&A landscape, and what agencies actually earn

The median home health agency runs a 7.2% EBITDA margin. The agency at the 25th percentile runs a negative one. No other post-acute sector keeps its downside that close to the middle, and that fragility, not the median, is the business.

• EBITDA margin — 7.2% · Lowest of the three post-acute sectors
• 25th percentile — -1.4% · A quarter of agencies at or below breakeven
• Revenue per visit — $220 · Middle half $177 to $288
• Median revenue — $2.3M · Roughly 10,800 visits a year

Home health looks like the easiest sector in post-acute to operate. There are no beds, no real estate, and almost no capital on the balance sheet. It is also the hardest of the three to earn a stable margin in, because the same asset-light model that keeps costs low leaves an agency fully exposed to a payment system that is tightening from two directions at once. Here is what agencies earn, why the spread runs so wide, and why strategic buyers are consolidating the sector even as its economics get harder.

What the home health sector looks like

The file holds 5,791 Medicare-certified home health agencies. After screening consolidated filings and implausible outliers, 5,608 agency-level filings drive the numbers here. These are small businesses, smaller than either of their post-acute neighbors: median annual revenue is about $2.3 million, with the middle half between $1.1 million and $5.0 million and the top decile near $10.8 million. The median agency runs on roughly 10,800 visits a year.

Ownership is almost entirely commercial: about 94% for-profit, 6% nonprofit, and a rounding error of government agencies. That is the most for-profit-heavy ownership base of the three post-acute sectors, and it is one reason the sector both trades actively and turns over quickly. Like hospice, home health is asset-light: care is delivered in the patient's home, so capital and rent take a median of just 1.8% of revenue. The cost base is labor, and the model lives or dies on visit economics.

The sector is growing even as its margins compress. An aging population and a clear payer preference for treating patients at home rather than in a facility keep demand rising, and the agency count has been climbing, with MedPAC flagging California and Los Angeles as outsized centers of new-agency growth, a pattern it watches closely. Rising demand meeting falling rates is the tension that defines home health: more volume, thinner economics on each unit of it.

Margins: thinner and more variable than you would expect

Home health earns the lowest and least stable margins in post-acute. The median EBITDA margin is 7.2%, below skilled nursing at 9.2% and hospice at 10.2%. The metric is measured before rent, but with almost no real estate in the sector, EBITDA and EBITDA nearly coincide here. What sets home health apart is not the median but the tail. The bottom decile runs a negative 14.3% margin, the 25th percentile is already negative at negative 1.4%, and 28% of agencies post a negative margin outright. Nearly half come in at or below 5%. A full quarter of the sector is at or below breakeven before you screen for anything.

That is a wider and deeper downside than either neighbor. Skilled nursing and hospice each run about a fifth of providers negative; home health runs more than a quarter, and its negative tail reaches further. The operating line tells the same story: the median operating margin is 4.6%, healthier than skilled nursing because there is no rent to pay, but more than a third of agencies still finish underwater. This is a sector where the median looks like a functioning business and the 25th percentile looks like a workout.

The dispersion is the diligence point. With the interquartile range running from negative to the high teens, a national median tells you almost nothing about a specific agency. Two agencies of the same size in the same state can sit on opposite sides of breakeven depending on visit mix, payer mix, and how tightly they run their clinical labor. Underwrite the agency, not the sector.

Revenue per visit: the operator metric that matters

Home health is measured per visit, the way skilled nursing is measured per bed and hospice per patient-day. The median agency books about $220 in revenue per visit, with the middle half between $177 and $288. That single number carries most of the operating story, because a visit is the unit of both revenue and cost, and the gap between what a visit earns and what it costs to staff is the whole margin.

• Median visit mix — Median share per visit type
• 50.5% — Skilled nursing
• 32.2% — Physical therapy
• 5.7% — Occupational therapy
• 2.1% — Aide
• 0.5% — Speech

Each figure is that visit type's own median across agencies, so the five do not sum to 100%. The unfilled remainder of the bar is that gap, not a missing category.

Revenue per visit moves with visit mix. A home health episode blends skilled-nursing visits, physical and occupational therapy, speech therapy, and home health aide visits, each with a different cost and reimbursement weight. In the file, the median agency runs roughly half its visits as skilled nursing and about a third as physical therapy, with occupational therapy, speech, and aide visits making up the rest. Therapy-heavy agencies and nursing-heavy agencies are different businesses at the same revenue, which is why revenue per visit read alongside the mix tells you more than either does alone. An agency near the $288 upper quartile is running a richer, higher-acuity visit mix than one at $177, and it has more room before a rate cut turns a visit unprofitable.

The consolidation story: strategics and private equity

For a sector this fragmented, home health is being consolidated aggressively, and mostly by strategics rather than financial sponsors. The cost-report file identifies 603 operators across roughly 5,800 agencies, and three quarters of them run a single location. But the top of the market is more concentrated than hospice: the largest operator, CenterWell, runs about 3.6% of agencies, and the next names, Amedisys, Enhabit, and Elara Caring, are national platforms. The largest ten hold 11.3% of agencies. Unlike hospice, where private-equity roll-ups dominate the buyer list, home health's biggest operators are public and strategic.

The deal record shows why. In Scope Research's register, more than 540 home health transactions have closed since 2019, peaking at 107 in 2021 before financing costs cooled the pace. The most acquisitive buyers, including LHC Group, The Pennant Group, Amedisys, Aveanna, and Addus, are largely public strategics assembling national footprints, with private equity a smaller share of the buyer pool than it is in hospice.

When a payer buys the two largest home health platforms in the country, the thesis is not the agency margin; it is owning the lowest-cost site of care and steering its own members into it.

The defining move was UnitedHealth's Optum acquiring Amedisys for roughly 1.6 times revenue and 15 times EBITDA, following its earlier purchase of LHC Group. That deal also reshaped the tier below it: to clear antitrust review, agencies were divested to buyers like BrightSpring and Pennant, seeding the next set of consolidators. The through-line is that the most valuable thing about a home health agency to a large strategic is not its standalone margin but its position as the place a risk-bearing payer most wants to direct its members.

• Multiple — Median · Middle half · n
• Price to EBITDA — 7.4x · 4.9x to 10.0x · 76
• Price to revenue — 0.9x · n/a · n/a

Deals with a disclosed, reliable multiple only. Pure home health agencies trade closer to 5.7x EBITDA and 0.8x revenue.

What buyers pay reflects the margin reality. Priced home health deals in Scope Research's valuation set clear at a median of about 7 times EBITDA and 0.9 times revenue, and pure home health agencies trade lower still, closer to 6 times. That is a clear discount to hospice, which trades near 10 times, and it is the market pricing home health's thinner margins and sharper rate risk. The exceptions are the platform deals, where a strategic pays up for national scale and payer relationships rather than for the standalone economics.

Why the numbers vary: visit mix, payer, and the rate squeeze

One dynamic explains most of the confusion around home health margins, and it is the same shape as skilled nursing's, only sharper. On Medicare fee-for-service patients alone, home health is highly profitable. MedPAC put the fee-for-service margin at 21.2% in 2024 and has recommended a 7% rate cut for 2027 on the view that the sector can absorb it. On an all-payer basis, the same agencies run near breakeven. The cost-report data, which blends every payer, lands at a 7.2% median with a quarter of agencies negative, much closer to the all-payer reality than to the fee-for-service headline.

The wedge between those two numbers is Medicare Advantage. As enrollment shifts from traditional Medicare into Advantage plans, a growing share of home health volume is paid at rates well below fee-for-service, by some provider estimates a delta of around 38%. Fee-for-service Medicare still accounts for a majority of the sector's revenue while covering a minority of its patients, which is another way of saying traditional Medicare margins are subsidizing below-cost Advantage volume.

Layer on PDGM and the squeeze comes from a third side. The Patient-Driven Groupings Model, which took effect in 2020, shifted payment from a visit-volume basis to 30-day periods priced on patient characteristics, and CMS has since applied behavioral-adjustment reductions that the industry argues overcorrect. The net effect is a base rate that has drifted down in real terms even before the latest recommended cut. A sector being pressured on the base rate, on payer mix, and on the payment model at once is a sector whose downside tail is deep by design, not by poor execution.

Geography and visit mix set where a given agency lands inside all of that. State markets differ in Advantage penetration, labor cost, and competitive density, and an agency's therapy-versus-nursing mix decides how a rate change flows through. Read a target against a local, same-payer-mix comp, not the national line.

Using a benchmark responsibly

Cost-report data is the right tool for market position and the wrong tool for a valuation opinion. The figures are self-reported, unaudited, and lag current operations by 12 to 24 months, and in home health that lag matters more than usual, because the payment picture is moving quickly. Use medians rather than means, since more than a quarter of agencies run negative and an average would be meaningless, and screen outliers before trusting a slice.

Home health adds its own checklist. Read the margin together with payer mix and Advantage exposure, since two agencies at the same reported margin can face very different forward rate risk. Watch visit mix and revenue per visit, because that is where a rate change shows up first. And separate the fee-for-service margin from the all-payer one; a benchmark that quotes only the Medicare figure will overstate the health of an agency whose real book is half Advantage. A benchmark tells you where an agency sits relative to its market. It does not tell you what the agency is worth, and getting to a defensible number is the work of a qualified appraiser who can see the payer contracts a cost report cannot.

To place a specific agency or market against the full distribution, the Post-Acute tool returns median revenue, margin, and revenue per visit for any market on the free tier, with the full percentile curves and per-agency financials on a plan. For the operators consolidating the sector, see the largest home health operators; for the metric that drives agency economics, see home health revenue per visit; and for how the sector compares on margin, see hospice economics.

Sources and method

• Source — CMS HCRIS provider cost reports, FY2024 and FY2025 filings
• Universe — 5,791 Medicare-certified home health agencies
• Analysis set — 5,608 agency-level filings after dropping consolidated filings and margin-plausibility outliers
• Margin definition — EBITDA here is measured before rent and capital charges, which take a median 1.8% of home health revenue, so EBITDA and operating margin nearly coincide. Skilled-nursing benchmarks are quoted as EBITDAR because leases dominate that sector
• Deal data — Scope Research Volume and Valuation Databases; 542 transactions 2019-2026 with 2026 partial, and multiples covering deals with a disclosed, reliable figure
• External anchors — MedPAC's 21.2% fee-for-service margin and 7% rate-cut recommendation, the ~38% Advantage rate gap, and PDGM adjustments are context, not computed here
• Known limits — Self-reported, unaudited, and lagging current operations by 12 to 24 months, which matters more here because the payment picture is moving quickly

Full methodology and limitations

Disclaimer

This article is a market-data benchmarking resource derived from publicly available Medicare cost reports and third-party M&A data. It does not provide, and must not be relied upon as, a fair market value determination, valuation opinion, appraisal, or legal, tax, or compliance advice. Cost-report figures are self-reported, unaudited, and subject to revision. The opinion of value for any specific arrangement remains the professional judgment of a qualified appraiser.