Several large at-home care providers have now reported their Q1 2026 results, and two common threads emerged as I reviewed my notes from their earnings calls. Interesting comments on M&A represented one of the themes. For BrightSpring Health Services (NASDAQ: BTSG) and Pennant Group (NASDAQ: PNTG), the “digestion” of Amedisys assets acquired last year remains […] The post Where Addus, BrightSpring, Pennant See Upside In Fraud Crackdowns, Opportunity In M&A appeared first on Home Health Care News.
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Several large at-home care providers have now reported their Q1 2026 results, and two common threads emerged as I reviewed my notes from their earnings calls.
Interesting comments on M&A represented one of the themes. For BrightSpring Health Services (NASDAQ: BTSG) and Pennant Group (NASDAQ: PNTG), the “digestion” of Amedisys assets acquired last year remains the central gravity for their 2026 playbooks. Addus (NASDAQ: ADUS), meanwhile, is at a different point in its dealmaking cycle, emerging as the only one of the three signaling a readiness for large wagers.
At the same time, a second force is beginning to reshape the landscape. The federal government’s intensified focus on fraud, waste and abuse is introducing new pressures, but for providers with the scale to withstand the scrutiny, creating new opportunities.
In this week’s exclusive, members-only HHCN+ Update, I’ll dive into Q1 earnings calls from Pennant, BrightSpring and Addus, offering analysis and key takeaways, including:
– How Pennant and BrightSpring are digesting 2025 acquisitions
– Why Addus is re-entering “hunting mode” for larger assets
– How a heightened governmental focus on fraud, waste and abuse is becoming an unlikely catalyst for market-share gains
Fraud concerns in 2026
As I reviewed the earnings calls, I was surprised that two of the companies see a silver lining in the government’s intensified focus on fraud.
Home health fraud has become a hot topic at the national level, mirroring the evolution of hospice fraud scrutiny and enforcement. Evidence that home health fraud has entered the cultural zeitgeist came this week when FBI Director Kash Patel shouted out feds’ suspension of 23 home health agencies and 447 hospices in Los Angeles in his contentious AI-generated video riffing on the Beastie Boys’ music video for their song “Sabotage.”
The second Trump administration’s focus on fraud, waste and abuse has largely been commended by the home health industry, though often with words of caution about the need to protect compliant providers.
Both Addus and Pennant commended efforts to root out fraud, waste and abuse – and they both found a version of silver lining.
“For example, in California or Arizona, where there’s been aggressive enforcement action, that’s opened up new opportunities or reopened opportunities for our agencies that are long-standing parts of those communities that have delivered excellent clinical quality, deep compliant partnership,” John Gochnour, Pennant’s president and chief operating officer, said. “So there are opportunities for us as bad actors are rooted out. And so we see that as a potential opportunity.”
The opportunity that Pennant sees is unlikely to be distributed evenly. Large, well-capitalized providers with significant compliance infrastructure are positioned to benefit, while smaller (and, of course, non-compliant) operators face increasing pressure.
As enforcement intensifies, the likely outcome is a redistribution of market share toward scaled providers.
Addus found a different silver lining: reimbursement. Specifically, leadership is hoping that the program integrity efforts will lead to better home health rates for 2027.
“If some of the things in the fraud, waste, and abuse area potentially have been used in the calculation [for the home health final rule] and with [fraudulent providers] maybe out of the mix and identified, we are hopeful that there will be more positivity in the rate that we will see this year,” President and Chief Operating Officer Brian Poff said.
CEO and Chairman R. Dirk Allison also took the stance that smaller providers will be the ones to feel a pinch from increased program integrity efforts.
“The fact that we are large and spend millions of dollars on compliance bodes very well for what the administration is trying to do – that is, take out the players, mostly smaller players, that are not doing the right thing and are just billing and not following through,” Allison said. “We are pleased with the administration’s focus, and we believe long-term it will be a benefit to our company.”
BrightSpring did not directly address the increased emphasis on rooting out fraud, but if I read between the lines, I would hazard a guess that the company’s emphasis on quality metrics and standardization has taken on added importance in the current environment. Of course, a focus on CMS stars, timely start-of-care and centralized intake processes has benefits other than fraud-proofing a business.
Old and new M&A
My conversations with home-based care M&A experts indicate that dealmaking in the space is trending up. And our reporting backs that up, with several notable deals occurring thus far this year. See Aveanna Healthcare Holdings’ (NASDAQ: AVAH) acquisition of Family First Homecare, Dovida’s acquisition of A Place At Home and Kinderhook Industries’ acquisition of Enhabit Inc. (NYSE: EHAB) for some notable examples.
The dealmaking approaches of Pennant, Addus and BrightSpring demonstrate that providers are continuing to pursue deals in the space – but the acquisition growth engine is showing up in different ways across the companies.
Pennant and BrightSpring, both of which executed large deals in 2025 through their acquisitions of Amedisys assets, continue to consider new deals, but with a particular emphasis on discipline as they execute their integration efforts. Like a snake after a meal, both companies are digesting their large acquisitions.
But both are still curious, at least, about future snacks. BrightSpring is sticking with its “bread and butter” – entering new markets and expanding its geography through tuck-ins.
CEO Jon Rousseau stated that the company is looking to stay within its typical mid-range of leverage on any new deals and overall anticipates a “historically very consistent view and strategy” through the next few quarters.
Pennant will also evaluate tuck-in deals, provided they don’t distract from its integration efforts. The company is also looking to stay active with its joint ventures and strike new deals with integrated health systems.
Pennant leadership spoke more strongly about senior living acquisitions. So while it digests its home health and hospice additions, we’re likely to see bigger deals in that sector from the company.
And Addus is making strides on its own M&A strategy. The company acquired HomeCourt Home Care on May 1 and announced that it has entered into a definitive purchase agreement to acquire another similar-sized provider also in the state of Indiana.
The company is prioritizing deals that add density or expand its clinical services. While BrightSpring and Pennant are in digestion mode, Addus is signaling a return to larger-scale dealmaking. Allison said the company is considering two or three opportunities that are “of size” – similar to the scale of its $350 million acquisition of Gentiva’s personal care assets.
Taken together, these approaches give credence to the upward trend of dealmaking in the home-based care industry and demonstrate how major deals in 2025 continue to impact major players’ strategies.
As dealmaking accelerates and enforcement intensifies, the gap between scaled, disciplined operators and the rest of the market is widening. For some, that shift presents risk. For others, it is a clear opportunity.
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