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Selling a Home Health or Home Care Agency in Texas: Valuation, Buyers and What to Prepare
By Josh Campbell, Business Broker · First Choice Business Brokers Dallas Metro · Updated October 2026
Types of agencies and why it matters
| Agency type | What it does | Valuation notes |
|---|---|---|
| Non-medical home care (personal assistance services) | Help with daily living, companionship | Often private pay or Medicaid; values depend on hours billed and caregiver retention |
| Licensed home health | Skilled nursing and therapy, not Medicare-certified | Smaller buyer pool |
| Licensed and Medicare-certified home health | Skilled care billed to Medicare | Strong demand; Medicare rules shape the deal |
| Hospice | End-of-life care | Often the highest multiples; heavy regulatory scrutiny |
Why home health agencies attract buyers
- An aging population and strong demand for care at home
- Lower cost than facility-based care, favored by payers
- Private equity and regional operators actively buying agencies
- Texas's large and growing senior population
What drives valuation
| Factor | Raises value | Lowers value |
|---|---|---|
| Payer mix | Diversified: Medicare, managed care, private pay, VA | Heavy reliance on one payer or Medicaid rate |
| Referral sources | Many hospitals, physicians and discharge planners | One or two referral sources |
| Compliance | Clean state surveys and Medicare audits | Deficiencies, audits, repayment demands |
| Quality | Strong star ratings and outcomes | Low ratings, complaints |
| Staff | Stable nurses, administrator and caregivers | High turnover, owner is administrator |
| Census and hours | Growing patient census or billed hours | Declining or volatile volume |
| Systems | EMR, scheduling and billing software | Paper processes |
Texas and Medicare regulatory items
- HCSSA license: Texas Health and Human Services Commission (HHSC) licenses agencies as Home and Community Support Services Agencies. A change of ownership generally requires the buyer to apply for a new license, so plan the timing carefully.
- Medicare change of ownership (CHOW): certified agencies must report and process ownership changes with CMS.
- Medicare 36-month rule: home health agencies that changed majority ownership within 36 months of initial enrollment, or of their last majority ownership change, may face restrictions, with some exceptions. Check this early.
- Medicaid and managed care contracts: confirm which contracts can be assigned and what credentialing a buyer needs.
- Stock sale versus asset sale: because licenses and provider numbers are hard to transfer, healthcare deals often use stock sales. Work with a healthcare attorney.
Who buys home health agencies
- Regional and national operators: expanding into new Texas markets
- Private equity backed platforms: consolidating agencies
- Healthcare entrepreneurs: often nurses or administrators, sometimes with SBA financing
- Hospital systems and related providers: adding post-acute services
How to prepare your agency for sale
- Organize license, certification, survey and audit history.
- Show revenue by payer and by referral source.
- Track census, visits or billed hours, and caregiver turnover.
- Make sure you have a qualified administrator and director of nursing who aren't the owner.
- Review managed care and Medicaid contracts for assignability.
- Check 36-month rule and change-of-ownership timing with a healthcare attorney.
- Clean up your financials and document your add-backs.
Josh's take: Home health owners learn fast that the license on the wall is worth less than it looks. In Texas the license doesn't transfer, and Medicare's 36-month rule can stop a deal cold. What buyers are really paying for is the referral relationships with discharge planners and physicians, plus a clean survey history. Start the regulatory conversation with a healthcare attorney before you start the sale.
Frequently asked questions
What multiple does a home health agency sell for?
Smaller agencies commonly sell for 2.5 to 4 times SDE. Larger agencies with management in place can bring 4 to 8 times EBITDA, with hospice often higher.
Does my Texas license transfer to the buyer?
Generally, a change of ownership requires the buyer to obtain a new HCSSA license through HHSC. Plan the timing carefully.
What is the Medicare 36-month rule?
It can restrict selling a certified home health agency within 36 months of initial Medicare enrollment or of the last majority ownership change. Some exceptions apply, so get legal advice early.
Is non-medical home care easier to sell?
It's usually simpler from a regulatory standpoint, but value depends on hours, payer mix and caregiver retention.
This page is general information, not legal or regulatory advice. Talk with a healthcare attorney about licensing and Medicare rules for your agency.