How to Start a Private Home Health Care Agency

bizfluent article image

Health image by Greg Carpenter from

Before opening a private home health care agency, it is important to decide whether to open a medical skilled home health agency or a non-medical home care agency. The non-medical home care agency offers personal care, meal preparation and assistance with daily living activities like housekeeping and transportation. This type of service does not require as many licensing requirements from caregivers. Billing for this type of business is usually made directly to the client or client's family, instead of a third party billing source. On the other hand, a medical home health agency will have extensive licensing and Medicare and Medicaid certification requirements, and billing is usually made to a third party insurance company.

Medical Skilled Home Health Care Agency

Look for a business location in an area with a large senior population. Check with the Census bureau to find cities with a large population of people over the age of 65. (See Resources.)

Set up the business either as a Sole Proprietor, Partnership or Limited Liability Company. Consult an attorney and a CPA to do this. Obtain your Employer Identification Number (EIN) from the IRS for identification of your business and its tax liabilities. (See Resources.)

Visit the state licensing office to determine the requirements for a home health care center. These regulations will vary across states. Meet all the necessary licensing and certification requirements before opening a home health care center.

Make business documentation like letterhead, fliers, brochures and business cards. Advertise your home health care center in local newspapers, online and with fliers.

Hire part-time experienced health care workers to help you and to keep overhead costs low. Be sure to check nursing credentials with the American Nurses Association. Perform background and criminal record checks on any home health care workers you hire. Websites like People Records, Background Checks or Integra Scan can do background checks for you; however, they do require a small fee. (See Resources.)

Contact the State Medicare agency to obtain the documentation and information for meeting insurer requirements. Visit the Medicare licensing offices and meet the licensing and certification requirements to accept Medicaid and Medicare clients. Contact a surety bond company to obtain a $50,000 bond to meet one of these requirements.

Expect a state representative to inspect your agency after your having made all the licensing and certification requirements. He will inspect your facilities to ensure it meets all the health and safety standards. You will also need to that you have at least seven clients and have enough funds to cover at least three months of operating costs.

Non-Medical Care Services

Find your business location as you did in Step 1 of Section 1. Register the business either as a Sole Proprietor, Partnership or Limited Liability Company.

Obtain an IRS Employer Identification Number (EIN) for the business. Register with the Secretary of State, and decide on the business name. Review with them any requirements or business licensing needs.

Create business documentation like letterhead, fliers, brochures and business cards. Advertise the business in newspapers, online and with fliers.

Write a procedures or manuals needed for attending to clients.

Hire caregivers based on their experience in the field they will be working in and conduct criminal record and background checks. Ensure that hired employees are conscientious and caring.