Addus HomeCare is planning to exit the state of New York, citing market challenges for home care.
The Frisco, Texas-based company said Tuesday it had inked a definitive agreement to sell its personal care business to Brooklyn-based home health and care services company HCS-Girling for up to $23 million. The purchase price of the deal at closing will depend on future operating requirements in the state, according to an Addus HomeCare news release.
Personal care services encompass activities of daily living and are typically covered by Medicaid. Fee-for-service Medicare may cover some services after a hospital stay or illness, and Medicare Advantage plans are also increasingly offering supplemental benefits that include in-home support.
Addus HomeCare Chairman and CEO Dirk Allison referenced Medicaid-related regulatory uncertainty in the news release announcing the sale. He said the company was unable to expand into home health and hospice in New York.
“We do not have the opportunity to offer all three levels of home care services there, and the well documented program challenges and start-and-stop changes in the state’s approach have consumed a disproportionate amount of management resources for limited financial contribution,” Allison said.
The company did not predict when the sale of its New York operations would be final. The deal is subject to regulatory approval.
The announcement comes roughly a month after the Centers for Medicare and Medicaid Services published the final Ensuring Access to Medicaid Services rule, which will require home care companies to direct 80% of Medicaid reimbursements to worker wages. While companies will have six years to comply with the rule, Allison warned last year when CMS proposed it that Addus might exit states with low Medicaid payment rates and expand into others with more favorable rates.
Addus HomeCare has more than 200 locations across 22 states, including New York.
This article originally appeared in Modern Healthcare.
Diane Eastabrook, Modern Healthcare , 2024-05-22 17:23:56
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