Care Hospice buys Hospice of Chattanooga

Hospice of Chattanooga and other end-of-life care and support services providers within the Alleo Health System have been purchased by Virginia-based Care Hospice, according to a joint statement from officials.

The purchase includes the assets of not-for-profit Alleo Health — Hospice of Chattanooga’s parent company — and its operating entities across Tennessee, Georgia, North Carolina and Alabama. Those assets include Alleo’s licenses, equipment, brand awareness and certificate of need authorizations, which are permits that allow health care providers to establish services in a given area.

“For more than 40 years, Hospice of Chattanooga and their care partners in the four-state Alleo Health network have provided familyfocused care meeting the medical, emotional and spiritual needs of patients and their loved ones. Care Hospice (‘Care’), a multi-state provider, recently assumed the operations of Hospice of Chattanooga and its four-state network,” according to the statement, which goes on to say that “patient services will continue unchanged under Care’s stewardship.”

Care’s purchase did not include the Hospice of Chattanooga Foundation, the organization’s fundraising or charitable arm.

Carol Newton, board chair of the Hospice of Chattanooga Foundation, said in the statement that “the family-focused care will remain consistent” during the transition because Hospice of Chattanooga and Care Hospice share similar missions.

“This new opportunity afforded to us will provide additional financial resources to fill in specific health care gaps, and over the next several months we will be connecting with community partners to gain valuable information on investing in improved health care outcomes,” Newton said, adding that the foundation is exploring other ways to serve the community.

Care Hospice is a for-profit venture with over 80 locations operating in 15 states, according to its website, which states that the company’s goal is to “integrate the passion of local organizations with the efficiency and compliance of much larger organizations.”

“We benefit from our local brands and continuity of care while being able to take advantage of our combined size, when it benefits our patients and agencies. We encourage our agencies to focus on providing quality care while Care manages the required back-office requirements,” the website states.

Although the joint statement says clinical services will not change under the new ownership, the future of Alleo and Hospice of Chattanooga’s administration — including CEO Tracy Wood — is unclear.

Care Hospice did not respond to repeated requests for comment on Wednesday.

Changes in Medicare reimbursement rates and other market forces are driving mergers and acquisitions in the hospice industry across the United States.

A 2018 report prepared for the U.S. Department of Health and Human Services found that between 2000 and 2013, “the number of Medicare beneficiaries served by chain hospices more than quadrupled, and [for-profit] chain agencies are now the largest category of hospice agencies nationally.”

CEO Tracy Wood took over Hospice of Chattanooga leadership in 2016, at which time the company brought in just more than $27.2 million for a year-end loss of around $755,000, according to the nonprofit’s 2016 IRS form 990.

Hospice of Chattanooga’s following years were characterized by major expansion and acquisition of other providers across the region, eventually rebranding and forming Alleo Health System.

In 2019, total revenue for the non-profit was around $48 million with a net income of $2.3 million, according to the company’s form 990.