Virginia Medicare-Certified Home Health Agency, 2 PTANs

$2.4M

Revenue

$610K

SDE

5.3x

Multiple

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Full Editorial Writeup

This is a Virginia-based Medicare-certified home health agency generating roughly $2.4M in annual revenue and $610K in cash flow, listed at $3.25M or a 5.33x multiple. The standout asset here is not the revenue run rate but the two active PTANs (Provider Transaction Access Numbers). A PTAN is the Medicare billing credential that lets an agency get reimbursed by CMS, and obtaining a new one is slow, heavily gated by CMS moratoria, and in many markets effectively closed to new entrants. Owning two of them is scarce and hard-to-replicate infrastructure.

Home health agencies deliver skilled nursing, physical and occupational therapy, and home health aide services to patients (typically elderly or post-acute) in their homes, paid primarily through Medicare. The revenue is driven by physician referrals, episodic care plans, and recurring reimbursement cycles that continue as long as the agency maintains compliance and its referral relationships stay intact.

The demographic backdrop is about as strong as it gets: an aging population, hospital systems pushing care out of expensive inpatient settings and into the home, and Medicare as a payer that keeps writing checks through any economic cycle. The buyer's edge here is regulatory scarcity plus a durable demand curve, though the flip side is that the entire model lives or dies on Medicare reimbursement rates and CMS compliance.

Why we like it

Earnings quality is anchored to Medicare, a federal payer that does not stop reimbursing during recessions, so the $610K cash flow rests on demand that is essentially non-cyclical. Home health serves elderly and post-acute patients who need care regardless of the economy, which is exactly the kind of boring, durable revenue we want.
The two PTANs are the real moat. CMS regularly imposes moratoria on new home health provider enrollments, meaning these billing credentials can be nearly impossible to obtain organically, so a buyer is paying for scarce regulatory access rather than just a book of patients.
Demographics are a multi-decade tailwind. The 65-plus population is expanding rapidly and the entire healthcare system is pushing care from hospitals into the home to cut costs, which structurally grows the addressable pool of Medicare home health episodes for years to come.
At 5.33x cash flow the price is on the higher side for a small services business, but the two-PTAN structure supports a de novo expansion story or a bolt-on for an existing operator who can layer volume onto credentials they could never acquire new.

How to improve it

Audit referral concentration and rebuild the physician and hospital discharge-planner pipeline within the first quarter. Home health volume lives on referral relationships, and diversifying beyond any single hospital or physician group directly de-risks and grows the episode count.
Fully utilize both PTANs. If one credential is underused relative to the other, direct new patient intake and staffing toward filling the second license, since idle billing capacity is pure margin left on the table.
Tighten OASIS documentation and coding accuracy to maximize reimbursement per episode under the PDGM payment model. Small improvements in case-mix coding and clinical documentation can lift revenue per patient without adding a single new referral.
Reduce clinician turnover with retention bonuses and route optimization. Staffing is the primary constraint in home health, so every nurse and therapist retained means more billable visits and fewer declined referrals.
Layer on higher-margin service lines the PTANs already permit, such as expanded therapy or specialty chronic-care programs. This deepens revenue per patient and strengthens value-based purchasing scores that increasingly drive Medicare payment.
Invest in compliance and survey readiness immediately. A clean CMS survey record protects the PTANs (the entire value of this deal), so proactive quality and documentation systems are non-negotiable capital.
Explore geographic expansion within Virginia using the existing credentials. If service areas are underpenetrated, adding coverage territory grows volume without needing new provider enrollment.

Diligence notes

Verify both PTANs are active, in good standing, and free of any CMS sanctions, corrective action plans, or payment suspensions. The credentials are the core asset, so any enforcement flag or history of overpayment recoupment could gut the value.
Confirm how the PTANs transfer under a change-of-ownership (CHOW). Medicare CHOW rules can require re-enrollment, revalidation, or trigger review, and buyers must understand exactly what survives closing and on what timeline.
Pull the last CMS/state survey results, deficiency history, and any pending or recent audits (RAC, ZPIC, UPIC). Reimbursement clawbacks and survey deficiencies are the biggest hidden liabilities in home health and can arrive after close.
Analyze payer and referral mix, episode volume trends, and revenue per episode under PDGM. Reconcile the reported $2.4M revenue and $610K cash flow to CMS remittance data and tax returns, since Medicare cost report figures should tie out precisely.
Assess clinician staffing, credentialing, and turnover. Confirm there are enough licensed nurses and therapists to service current census and that the agency is not carrying capacity that will walk out the door post-close.
Clarify the years in business, ownership history, and reason for sale, all of which are undisclosed. A short operating history or an owner exiting ahead of a survey or reimbursement change would materially reprice this deal.

Source

Originally listed on DealStream. View original listing →