A Fast-Paced Year for M&A: 2021 Year In Review and a Look at What’s Next for Healthcare

McBee M&A 2021 Year in Review

Mergers and acquisitions (M&A) in healthcare moved at a rapid pace in 2021 and had prolific deal volume. New regulatory and technological requirements along with tailwinds in certain sectors accelerated deal volume and industry dynamics. Below are some key drivers that played a part in accelerating industry consolidation and M&A activity in 2021 and we anticipate the ongoing impact of these into the 2022 M&A market trends.

  • Transition to the Patient Driven Groupings Model (PDGM) no-pay RAP on January 1, 2021
  • Review Choice Demonstration (RCD) implementation in Florida and North Carolina
  • National expansion of Home Health Value-Based Purchasing (HHVBP) in 2023
  • Federal mandate requiring states to implement Electronic Visit Verification (EVV) for Medicaid personal care services and home health services
  • Continued expansion of the Hospice Medicare Advantage Value-Based Insurance Design (VBID) Model
  • Rising demand and recognition of the importance of behavioral and mental health treatment
  • Telehealth and innovative delivery models leading to increased access to services
  • Industry resiliency demonstrated through the public health emergency (PHE)
  • Payment and Documentation changes for Evaluation and Management (E/M) Services
  • Increased incentive for Quality Payment Programs (QPP)
    • Merit-based Incentive Payment System (MIPS)
    • Medicare Shared Savings Program (MSSP)
    • Advanced Alternative Payment Models (APMs)
  • Continued decrease in physician fee schedule conversion factor (nearly 4% decrease from previous year)

Of the many factors impacting the M&A landscape, perhaps the most influencing has been the ongoing COVID-19 pandemic. This public health emergency has led to patients seeking home-based care as an alternative to facility-based care. The pandemic has also accelerated the shift to utilizing telehealth and virtual visits across all health care settings. This new demand has expedited the delivery of behavioral health and specialty physician treatment from nontraditional resources. Consumers now have more options than ever when seeking mental health and other specialty physician services.

Read our blog post for even more insights on the market impacts and trends impacting the M&A landscape. We cover contributing factors to consolidation like capital gains tax increases, high industry fragmentation, growing Private Equity interest in healthcare & more.

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McBee M&A Excels in 2021

30

Number of deals with Private Equity Involvement

$3B+

Total purchase price of M&A transactions McBee supported in 2021

38

Number of M&A transactions McBee supported in 2021

McBee Associates healthcare consulting and advisory services

As we look to 2022, we anticipate another active year of transactions across various sectors of healthcare nationwide.

The regulatory landscape of approved and proposed regulations such as value-based purchasing and capital gains tax increases, respectively, may create both turbulence and acceleration of deals prior to taking effect. As deal volume has grown in recent years, so too has McBee M&A support services. McBee is honored to serve as a trusted strategic advisor to support our clients. We’ve partnered with buyers and sellers in the industry including healthcare service providers, PE firms, law firms, and individual investors; our services have helped get deals done efficiently, while uncovering key compliance risk areas in the process.