As the owner of a New Hampshire hospice practice, you’ve built a business on compassion and care. When considering a sale, you deserve a process that honors that legacy. This guide provides an overview of the current market, from key state-specific regulations to valuation drivers. The national hospice market is growing, presenting a unique window of opportunity. Navigating this landscape successfully requires a clear strategy to maximize your practice’s value and ensure a smooth transition.
Market Overview
The timing for selling a hospice practice is strong. Nationally, the industry is valued at over $27 billion and is projected to grow at an annual rate of 5.4%. While specific data for New Hampshire’s hospice market is nuanced, the state’s broader home care sector is on a similar upward path, expected to reach $568 million by 2025. This growth is fueled by reliable revenue streams, as hospice services are covered benefits under Medicare, Medicaid, and most private insurance plans. Buyers see this stability and growth potential, making well-run New Hampshire practices attractive acquisition targets. Your practice is not just a local service. It is part of a dynamic national trend.
Key Considerations for New Hampshire Sellers
Beyond market trends, selling a hospice in New Hampshire involves navigating specific state and federal rules. Understanding these factors early can prevent significant delays and complications. If you are starting to think about a sale, you should consider these points.
- The 36-Month Rule. This is a critical factor. Federal regulations from CMS prohibit a change in majority ownership for three years after your practice’s initial Medicare enrollment or its last change of ownership. This rule directly impacts the timing of your sale and the pool of eligible buyers.
- State Licensing. Your practice must have a valid license from the New Hampshire Department of Health and Human Services (DHHS), compliant with regulations like He-P 823 and RSA 151. Buyers will scrutinize your compliance history during due diligence.
- Referral Source Stability. Buyers are not just acquiring your census. They are acquiring your streams of referrals from hospitals, physicians, and long-term care facilities. Demonstrating diverse and loyal referral relationships is key to proving your practice’s long-term health.
Market Activity
The New Hampshire healthcare market is active. We are seeing a trend where larger health systems and private equity groups are acquiring smaller, independent providers to expand their service areas and capabilities. While specific transactions are private, public announcements show a pattern of consolidation within the home health and hospice space. This activity suggests that strategic buyers are looking for well-managed practices with a strong community presence and clean compliance records. For an independent owner, this trend can present a significant opportunity. It means your practice could be a valuable strategic asset for a larger organization looking to grow in the Granite State.
The Sale Process at a Glance
Selling your practice is a structured process, not a single event. Each stage requires careful preparation to protect your interests and maximize the outcome. An unmanaged process can encounter unexpected challenges.
| Stage | Key Challenge for the Seller |
|---|---|
| 1. Preparation & Strategy | Defining your personal and financial goals for the exit. |
| 2. Valuation | Establishing a defensible value based on normalized data, not just tax returns. |
| 3. Confidential Marketing | Reaching a wide pool of qualified buyers without alerting staff or the community. |
| 4. Due Diligence | Managing the buyer’s deep dive into your financials, operations, and compliance. |
| 5. Negotiation & Closing | Securing favorable terms on the final price, transition, and legal agreements. |
How Your Hospice Practice is Valued
A buyer will not value your practice based on revenue alone. Sophisticated buyers and investors focus on a key metric: Adjusted EBITDA. This stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is “adjusted” to normalize for any owner-related expenses that would not continue under new ownership. This gives a true picture of the practice’s profitability. For a hospice, this financial baseline is then evaluated against key operational strengths. These include your average daily census, the diversity of your referral sources, payer contracts, and the quality and stability of your clinical team. A professional valuation tells the full story. It combines your financial performance with your operational strengths to determine your practice’s true market worth.
Planning for Life After the Sale
The transaction is not the end of the story. A successful exit strategy includes a clear plan for what comes next, both for the practice and for you personally. Thinking about these elements beforehand is part of a well-managed process.
Ensuring a Smooth Transition
A primary concern for any buyer is a seamless transition of care. They will want to know there is a plan to retain key staff and maintain relationships with referral sources. Your role in this transition can be a key point of negotiation and can be structured to fit your desired level of involvement.
Protecting Your Legacy
You have built a reputation for compassionate care in your community. The right buyer will be one who respects and continues that legacy. Part of our process involves finding a partner whose values align with yours, ensuring the practice you built continues to thrive.
Structuring Your Proceeds
The structure of your sale has major tax implications. Options like earnouts or equity rollovers can affect your cash at close and your long-term wealth. Planning this with an advisor ensures the deal is structured to meet your financial goals in the most tax-efficient way possible.
Frequently Asked Questions
What is the current market outlook for selling a hospice care practice in New Hampshire?
The hospice care market is strong nationally with an industry value over $27 billion and a growth rate of 5.4% annually. New Hampshire’s broader home care sector is expected to reach $568 million by 2025, fueled by stable revenue from Medicare, Medicaid, and private insurance. This makes well-run New Hampshire hospice practices attractive to buyers looking for stable and growing opportunities.
What is the ’36-Month Rule’ and how does it affect selling a hospice practice in New Hampshire?
The 36-Month Rule is a federal regulation from CMS that prohibits a change in majority ownership of a hospice practice for three years after its initial Medicare enrollment or its last change of ownership. This rule impacts the timing of the sale and limits the pool of eligible buyers, so it is critical for sellers to consider this when planning their exit.
What state-specific regulations must I comply with to sell my hospice practice in New Hampshire?
Your practice must have a valid license from the New Hampshire Department of Health and Human Services (DHHS) and comply with regulations such as He-P 823 and RSA 151. Buyers will carefully review your compliance history, so maintaining good standing with state licensing is essential for a successful sale.
How is the value of a hospice care practice determined in New Hampshire?
Valuation focuses on Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), adjusted for owner-related expenses. Operational strengths like average daily census, referral source diversity, payer contracts, and the stability of the clinical team are also evaluated. A professional valuation combines these financial and operational metrics to establish the practice’s true market value.
What should I consider for life after the sale of my hospice practice?
Planning for life after the sale includes ensuring a smooth transition of care by retaining key staff and referral relationships, protecting the legacy of compassionate care you built, and structuring your proceeds in a tax-efficient way. Negotiations may include your role in the transition and options like earnouts or equity rollovers to optimize your financial outcomes.
