Care Hospice Acquires Hospice of Chattanooga, Alleo Health System

Care Hospice has purchased the assets of Tennessee-based nonprofit Hospice of Chattanooga and its parent organization, Alleo Health System. As a result of the transaction, Chattanooga and Alleo will transition to for-profit status. Financial terms were undisclosed.

Alleo and its affiliates care for patients in Tennessee, Georgia, North Carolina and Alabama. The organization was established in 2019 when Hospice of Chattanooga reorganized as a larger multi-state provider, retaining its original brand as an Alleo subsidiary. The Care Hospice transaction did not include Hospice of Chattanooga’s philanthropic foundation. 

“For more than 40 years, Hospice of Chattanooga and their care partners in the four-state Alleo Health network have provided family-focused care meeting the medical, emotional and spiritual needs of patients and their loved ones,” according to a joint statement from the two organizations shared with local newspaper the Times Free Press. “Patient services will continue unchanged under Care’s stewardship.”

Alleo, Hospice of Chattanooga and Care Hospice did not respond to Hospice News regarding the deal.

Alleo has been on a growth trajectory during the past two years. The organization has completed a number of acquisitions of its own, including Comprehensive Care, Upper Cumberland Hospice, ABC Hospice, and Angel Heart Hospice. Financial terms for each transaction were undisclosed.

Hospice of Chattanooga earned more than $48 million during 2019, with a net income in excess of $2.26 million, according to documents filed with the Internal Revenue Service (IRS). This is a sharp increase from 2016 when CEO Tracy Wood took the helm of the organization. The hospice saw a loss of more than $750,000 that year. Its financial position has improved steadily since then.

Alleo is also the parent company of Palliative Care Services, Good Shepherd Hospice, and Kangaroo Kidz. Kangaroo Kidz is the Chattanooga region’s only pediatric specialty hospice and palliative care provider. Alleo and its affiliates have launched or expanded a number of specialized services in 2020 and 2021, including bereavement care for teens, dementia care, and pulmonary services.

Prior to this acquisition, Care Hospice operated 80 locations in 15 states under more than a dozen distinct brands. The agencies associated with these brands have largely autonomous executive teams, while centralizing back office functions such as billing, revenue cycle management, IT, vendor contracts and compliance through the larger Care Hospice organization.

“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,” the company’s website indicates. “We encourage our agencies to focus on providing quality care while Care manages the required back-office requirements.”