Home Health Agency Due Diligence: Buyer Checklist

Give each request a decision and a responsible reviewer

List the locations, service lines, legal entities and periods to review. Match the purchase documents with the agency's legal and operating records. Include branches and related-party services. An accurate review of one office does not automatically cover the rest of a multi-location business.

The home health transfer guide adds a six-row fictional service check to this review. It distinguishes missing arrangements, unconfirmed support and a location-status gap. Its completion rate measures listed evidence, not clinical readiness or approval.

Assign each question to a qualified reviewer. Cover the financial, clinical, payment, legal and operating work. Use one request log with the file date, reporting period, reviewer and open issue. A seller's response should link to supporting evidence. If a record is missing, say so. An explanation alone is not a verified fact.

The home-health seller exercise gives that request log a fictional date check. Three files arrive together, but their payment, leadership and ownership evidence covers different facts. Read the periods behind the upload date. Assign each remaining question to its reviewer before treating the package as current and confirmed.

Agree on the information cutoff and how new facts will be reported. The buyer needs to know whether payroll, claims and cash cover comparable periods. A later staff departure or payer notice can change the decision even after the initial folder is complete.

Reconstruct enrollment and ownership from the records

Request the initial Medicare enrollment effective date, current ownership chart, prior majority changes and relevant contractor letters. Match entity names, locations and identifiers. Compare those dates with the proposed deal. Include any linked steps. The agency's age alone does not show which transfer rules apply.

Under 42 CFR 424.550, a covered change within the relevant 36 months can prevent the provider agreement and billing privileges from conveying unless a listed exception applies. Asset sales, stock transfers, mergers and consolidations can be involved. Request the evidence for any claimed exception and have counsel assess it. (Source: 42 CFR 424.550)

Use the 36-month guide to organize that review. Record the contractor's actual response and any unresolved conditions. Do not mark the pathway approved merely because the seller has supplied an enrollment number or filed an application.

Test the application against the current moratorium

CMS's current material, reviewed September 6, 2026, describes the nationwide HHA and hospice moratorium effective May 13, 2026. It affects initial applications, including non-exempt majority-ownership changes. Determine whether the proposed deal requires one of those applications before relying on billing continuity. (Source: CMS enrollment moratoria)

The FAQs distinguish existing participation from affected new applications. They describe possible six-month extensions and do not permit individual-provider exceptions to the moratorium. An exception to the majority-ownership rule is a separate question. Neither a stock-sale label nor a hoped-for expiry should replace a documented analysis. (Source: CMS moratorium FAQs)

Track state licenses and payer consents alongside the federal work. If a relocation or branch change is planned, include the real service and staffing changes in the review. Use closing conditions that reflect what has been established and what the relevant authorities still need to decide.

A branch proposal also needs a clear account of parent support. The branch-purchase FAQ compares four fictional package records with the duties still unassigned after sale. Use that comparison to request the future team chart and keep commercial support questions beside the separate enrollment questions.

Reconcile claims to earned revenue and receipts

Request claims, contractual adjustments, denials, refunds, remittances and ending receivables for a consistent service cohort or reporting period. Match the totals to the ledger and bank records. Keep receipts for old services separate from current activity so collection timing does not look like growth.

Separate Medicare fee-for-service, managed-care and other payer groups actually present. Use AR aging by payer to examine balances, not to assume collectibility. For example, a pending appeal is evidence of an unresolved claim; it is not the same as an upheld appeal followed by payment. Request the actual status and cash evidence.

Use the buyer overpayment review to compare payment records with the scope of a claim review. Its fictional schedules share some claims. Removing those overlaps clarifies what was reviewed without estimating errors in the remaining payments.

Check payment periods without creating visit targets

Ask payment reviewers to connect the claims population with the agency's PDGM reports. CMS describes 30-day payment periods with applicable adjustments and per-visit treatment below the relevant visit threshold. Certification and care-plan review timeframes are separate. Label what each workpaper measures and the period it covers. (Source: CMS Home Health PPS)

Investigate changes in patient mix, low-utilization treatment, care costs and claim corrections. Have clinical reviewers explain whether selected records support the care delivered. A financial analyst should not infer patient need from a payment category or interpret a low-utilization percentage as proof of poor care.

If the buyer proposes improvement, record the action, evidence, responsible person and cost. Distinguish better billing accuracy from a change in services. The forecast must not depend on unnecessary visits or withholding needed care. A projected gain should remain separate from verified historical earnings.

Match quality reports to forecast payment years

Request the agency's expanded HHVBP reports and actual payment determinations. List the performance period and payment year for each report. CMS explains that earlier performance affects later Medicare fee-for-service payments. A buyer can therefore face payment effects tied to care provided before closing. (Source: CMS expanded HHVBP)

Keep confirmed adjustments separate from estimates of future performance. Ask the reviewer to show which evidence supports each forecast year. A public star rating is not the payment determination, and a favorable historical result should not be carried forward indefinitely.

Carry the supported payment basis into the cost review. The home-health earnings exercise uses a fixed service population and separate fictional changes. It compares what remains after the defined costs in each case. The result does not decide actual claims, reimbursement, quality performance or the services a patient needs.

Read survey findings, complaints and correction records alongside the quality reports. Mark whether a matter is open, a response has been filed or a resolution is documented. Identify staff responsible for reporting and follow-up so the buyer can fund and maintain that work after the handoff.

Test the staffing and owner-replacement assumptions

Request a role map for clinical leadership, nurses, therapists, intake, scheduling, billing and office management. Check the required credentials and staff or contractor terms. List vacant roles and backup cover. Compare the plan with actual schedules and paid work. One retained manager should not silently inherit several departing roles.

A buyer from another industry can use the qualified-team planning guide before relying on a retained-management claim. It distinguishes a name on the current chart from verified credentials, agreed future duties and actual availability. The fictional funding exercise does not approve a person for an HHA role.

Include travel, supervision, training, recruiting and paid time that cannot be billed. Review contractor invoices and terms for difficult coverage. A proposed saving needs evidence that work has ended or can be performed at the supported lower cost. It should not rest on unpaid labor or unavailable staff.

List the owner's recurring duties and temporary transition duties separately. Establish who will perform each task and with what access, skills and hours. Use the home-health overview to connect these findings with the earnings model. Necessary replacement work remains a cost even when the seller leaves.

Assess referral dependence and oversight practices

Measure referral concentration using a defined period and denominator. Distinguish inquiries, admissions and receipts associated with the reviewed services. Ask why important sources changed and whether records support management's explanation. A single percentage cannot describe all of those relationships.

Identify relationships managed mainly by a departing owner or employee. Review relevant arrangements with healthcare counsel. An introduction may help a handoff but does not transfer control over patient choice or guarantee future referrals. Growth plans need staffing and demand evidence of their own.

OIG's General Compliance Program Guidance is voluntary. It helps frame oversight, reporting and response questions without certifying compliance. Ask how staff raise concerns and what records show management's response. A written policy alone does not establish that the system works. (Source: OIG guidance)

The OIG review-scope FAQ compares fictional screening and service records. A care-team export omits billing and program-related systems contractors found in separate agreements. Use the exercise to identify which services need a scope decision. Keep that missing review evidence separate from an actual finding that someone is excluded.

Control records access and system continuity

Pre-NDA outreach should exclude financials, identity, exact location and identifying patient, staff, vendor or referral details. During later authorized financial review, coded or grouped records can still identify people. Removing names alone does not establish de-identification. (Source: HHS de-identification)

Arrange clinical-record access through qualified reviewers and a lawful process. Define the purpose, users, safeguards and handling of copies. HHS minimum necessary has its own scope and exceptions; an NDA alone does not authorize the disclosure. Use the records-custody guide to plan access and the eventual handoff. (Source: HHS minimum necessary)

For Medicaid services subject to EVV, add the EVV transition guide. Verify provider configuration, historical records and exceptions under the applicable program. Medicare certification and Medicaid visit reporting are separate requirements. A working login does not establish lawful use of another provider's credentials.

Fund the transition and resolve the final conditions

Build a cash forecast for payroll, vendors, systems and other necessary costs. State which receivables transfer and who collects mixed-period payments. Use the working-capital guide to distinguish closing-account terms from the cash required to operate. Test delayed receipts without assuming care costs can simply stop.

For each finding, record the commercial effect, evidence still needed, responsible adviser and resolution date. Some matters change price or require a funded plan. Others need an approval or make the proposed structure unworkable. A price reduction cannot substitute for lawful authority or safe care capacity.

Connect the final recommendation with the LOI and first 90 days plan. Jason Taken can coordinate the commercial process while qualified reviewers assess their fields. State the information cutoff and remaining conditions so the recommendation describes what the buyer can actually acquire and run.

Use the PDGM definition to distinguish payment periods from care-plan records, and the LUPA definition for the visit-threshold comparison. The EVV definition addresses a different record question for applicable Medicaid visits.

Use the 36-month-rule definition to screen the ownership timeline before the detailed legal review. Its fictional example shows why the buyer needs the full history of direct interests, not only the final purchase step.