This article has been updated and corrected.
A Florida-based nonprofit, Chapters Health, wants to acquire HouseCall Providers, the home-based primary care and hospice provider, from CareOregon. But the deal requires state approval at a time when the sectors in which it operates are under growing scrutiny.
CareOregon and Chapters Health submitted an application to the state’s healthcare merger review office in April, but the review has been on hold since May 4, when regulators submitted a number of questions about the details.
The Health Care Market Oversight program, formed by the Legislature in 2021 to protect against higher costs or threats to quality of care, is charged with conducting a 30-day preliminary review of major transactions before deciding whether to approve them or keep investigating.
Florida-based Chapters Health is a national provider of hospice and home-based healthcare services. The deal was driven by HouseCall Providers’ financial stress and by the financial trends in the healthcare industry, according to the application.
CareOregon didn’t ask Housecall Providers to find a new partner, Housecall Providers CEO Rebecca Ramsay told The Lund Report. She said the move stemmed from a desire to ensure a sustainable future for Housecall Providers while finding another nonprofit with which to affiliate.
Housecall Providers last year provided hospice, palliative and primary care services to about 3,500 homebound and chronically ill patients in Oregon. In February, it struck the proposed affiliation deal with the much larger Chapters Health.
Under Oregon law, corporations engaged in patient care must be owned or controlled by physicians. Currently, CareOregon holds 49% of the voting shares of HouseCall Providers, while 51% is held by the nonprofit’s Chief Medical Officer, Amit Shah. If the deal is approved, Chapters Health will take over the smaller portion of voting shares, while either its chief medical officer or an undetermined Oregon-licensed physician will take over the remainder, according to the two nonprofits’ application to the state.
With at least three weeks left in the preliminary review period, members of the public are invited to comment by emailing [email protected], leaving a voicemail at 503-945-6161 or by filling out a public comment form on the agency website.
Ramsay said she hopes for approval by the end of June.
Hospice, home care fields changing rapidly
Supporters of Housecall Providers say that providing primary care to homebound seniors saves money. But it's a challenging time for smaller providers.
In the multi-billion hospice industry, major players in the industry are acquiring regional providers and expanding into new markets. Among the recent deals was the just-approved arrangement in which nonprofit Providence spun off its hospice and home-health services to a joint venture with Compassus Health, a private-equity backed, for-profit company based in Tennessee.
Some for-profit hospice providers are engaged in shady practices to enroll patients, critics say. And the federal Centers for Medicare & Medicaid Services has paused new enrollments for new hospice and home healthcare agencies as part of a larger crackdown on fraudulent billing and other practices.
Similar concerns drove state lawmakers in Oregon to call for more safeguards on hospice, passing a law last year.
Housecall Providers was losing money
Portland-based Housecall Providers was founded as a home-based primary care servics agency by Dr. Benneth Husted in 1995, specializing in people with complex needs. It affiliated with CareOregon in 2017 and has continued to operate as a that way to the present day. It has 165 employees and, under the proposed affiliation, none would be laid off for 12 months, except for bad behavior.
Housecall Providers “has been operating at a financial loss for several years,” according to the nonprofit’s filing with the Oregon Health Authority. Labor and infrastructure costs, along with “recruiting challenges” caused HouseCall Providers to project an “unsustainable, near-term operating loss,” the application says. CareOregon historically had offset Housecall Providers’ operating losses with its investment income, but no longer can continue to do so, the filing says.
Without the affiliation with Chapters Health, Housecall Providers might have had to reduce services, lay off staff or “close valued medical services,” according to the application.
Ramsay said she focused on finding a potential partner that delivers healthcare services directly to patients and has experience in home-based care — experience that CareOregon, as a Medicaid insurer, didn’t have. And Ramsay wanted Housecall providers to stay part of a nonprofit.
Chapters Health was established in 1983 and operates 30 hospice and home healthcare brands, serving patients in Florida, Georgia, Virginia, Maryland, Washington D.C., Nevada, California and in Oregon, where it last year completed its affiliation agreement with Salem-based Willamette Vital Health, formerly known as Willamette Valley Hospice. According to the Florida company, it cares for about 6,000 hospice patients nationally. It has 4,108 employees, including 112 in Oregon. In its 2024 annual report, it reported total revenue of $535.5 million, most of it from Medicare.
Chapters has grown at a quickening pace, concluding 11 deals in the last 10 years and six in the last three, affiliating, partnering with or acquiring systems in Florida, Virginia, Georgia, Nevada, California and Oregon. While Chapters operates as a nonprofit, it operates a for-profit subsidiary, CareNu, that offers home health services and a Medicare Advantage plan. It also has a joint venture with Nexthealthcare Solutions, a for-profit, physician staffing company, that in turn, runs a different Medicare Advantage plan.
Ramsay said Oregon patients shouldn’t notice any change in their care from Housecall Providers. Behind the scenes, Chapters will provide a host of support services, from accounting to human resources and do so at a scale that will effectively reduce overhead costs, she said. Also, Housecall Providers should benefit from Chapters’ experience recruiting nurses, hospice aides and other employees that have been hard to find and retain.
CareOregon’s last major interaction with the state merger review program — a bid to be absorbed by a nonprofit California-based Medicare Advantage plan operator, did not go well, sparking complaints of delay. State regulators recommended against the deal, causing it to be withdrawn.
Thank you for this. Sad to see another reputable healthcare provider struggling in this market.