LHC Group to acquire Deaconess HomeCare for $60 million

LHC Group has signed a $60 million deal to acquire Deaconess HomeCare, which operates 33 home health, hospice and community-based service agencies.

LHC purchased the division from BioScrip, a provider in pharmaceutical and home care solutions.

Home health care providers have been struggling to maintain margins after a deep cut last year to CMS reimbursement rates—and consolidation has been key to their strategy. The cut amounts to a 14% reduction to home health reimbursement, and will be evenly phased in over four years.

Deaconess has annual revenue of $72.6 million, and operates in Mississippi, Tennessee, Kentucky, Illinois and Nebraska, according to a stock exchange filing. The cash purchase will expand Lafayette, La.-based LHC’s footprint to 342 locations in 27 states.

The deal follows LHC’s acquisition of Addus HomeCare and AseraCare Home Health in the first half of last year.

In the first nine months of 2013, LHC reported $17.4 million in net income, down from $20 million over the same period the previous year.

Follow Beth Kutscher on Twitter: @MHbkutscher