Addus HomeCare on Tuesday disclosed the sale of its New York personal care business to Brooklyn, NY-based home health and home care firm HCS-Girling. The purchase price for the transaction will be “up to” $23 million, the home care provider said.
The operations consist of all of the company’s personal care operations in the state of New York, including fiscal intermediary services under the New York Consumer Directed Personal Assistance Program (CDPAP), the company said. Addus operated seven home care locations in New York, according to its website.
“This has been a challenging market for Addus and no longer fits our growth strategy,” Dirk Allison, chairman and chief executive officer of Addus, said in a statement. “We do not have the opportunity to offer all three levels of home care services there, and the well-documented program challenges and start-and-stop changes in the state’s approach have consumed a disproportionate amount of management resources for limited financial contribution.”
New York’s state budget for fiscal year 2025, which Gov. Kathy Hochul (D) signed last month, slashes $200 million from CDPAP. Home care advocates described the governor’s budget using harsh terms such as “irresponsible and cruel” or “death by a thousand cuts.”
Addus’ exit from New York is expected to be “immaterial” to its consolidated earnings and yield a modest margin expansion, Allison added. The company intends to use the sale proceeds to reduce the outstanding balance on its revolving credit facility.
Despite its departure from the state, Addus remains focused on growing its personal care operations in other locations, according to Allison.
“We believe we can have a greater impact for both our clients and our shareholders by focusing on and growing other more strategic markets,” he noted.
Addus’ leadership indicated during a recent earnings call that scaling personal care operations in its most important markets is part of its strategy to mitigate the effects of the Medicaid Access Rule. And executives had previously said that the rule’s 80/20 provision may force the company to move out of certain states where the rule limits Addus’ operations.
HCS-Girling provides both medical and non-medical home care services to people in New York. It has a “solid reputation for personalized, professional care,” Allison said in a statement.
“We look forward to the opportunity to expand our personal care service coverage in the New York market,” Agnes Shemia, co-founder and co-chief executive officer of HCS-Girling, said in a statement. “Addus and HCS-Girling have a shared commitment to provide safe, quality care to more customers in the preferred home setting, and we will build upon the excellent reputation that Addus has already established in our market.”
