How to Start a Home Health Agency (2026 Operations Guide)

The first real decision in starting a home health agency is not a business-plan line item -- it is which of two very different businesses you are building. A private-duty home care agency provides non-medical help -- personal care, companionship, homemaker services -- with caregivers who are not clinicians, and it can often open in a few months. A Medicare-certified home health agency provides skilled nursing and therapy under a physician's plan of care, and the path to billing Medicare is long: state licensure, a survey, accreditation, and certification that can take the better part of a year or more, plus the OASIS, PDGM, and EVV machinery that comes with it. Same industry, wildly different startup.

This guide walks the operational path for both models in 2026: choosing your model, state licensing, the Medicare certification and accreditation path, the EVV mandate, hiring and credentialing caregivers, setting up payers, and building your technology stack. It is written for the founder as an operator, and it is explicit about where the regulated clinical requirements begin -- and where a general operations platform like Deelo helps versus where a certified clinical system is required and cannot be skipped.

Everything downstream -- licensing, staffing, software, timeline, capital -- flows from this choice. Private-duty home care is non-medical: caregivers assist with daily living, and you bill private pay, Medicaid waivers in many states, long-term-care insurance, or the VA. It is faster and cheaper to launch, does not require Medicare certification, and its software job is scheduling, HR, and billing. Medicare-certified home health is clinical: registered nurses and therapists deliver skilled care under a plan of care, and you bill Medicare and Medicaid under their rules. It requires state licensure, accreditation, and certification, carries OASIS, PDGM, and EVV obligations, and takes far longer and more capital to stand up. Some founders start private-duty to generate cash flow and pursue certification later; others go straight for skilled care. Decide deliberately, because you cannot bolt Medicare-certified clinical requirements onto a private-duty setup after the fact without real rework.

Most states require a license to operate a home care or home health agency, though the specifics vary widely -- some regulate non-medical home care separately from skilled home health, some require a certificate of need for skilled agencies that limits how many can open in an area, and a few are relatively light-touch for private-duty. Research your state's exact requirements early, because a certificate-of-need state can block a skilled agency regardless of how ready you are. Expect to register your business entity, meet requirements for an administrator and a clinical supervisor for skilled care, carry insurance and bonding, and pass any required surveys. Confirm current rules with your state's health department rather than relying on general guidance, since these change and differ by state.

If you are building a Medicare-certified home health agency, plan for a multi-step, months-long process. In broad strokes: obtain state licensure, enroll as a Medicare provider, treat an initial set of patients so there is care to survey, and pass a survey by an approved accreditation organization or a state agency confirming you meet the federal Conditions of Participation. Most agencies pursue accreditation through a CMS-approved body -- commonly ACHC, CHAP, or The Joint Commission -- which conducts the survey and signals quality to referral sources. The whole path from formation to your first Medicare-reimbursed claim commonly runs many months, sometimes well over a year, and requires capital to operate before Medicare revenue arrives. Confirm the current CMS requirements and accreditation steps directly, because the specifics and timelines are updated periodically.

Electronic visit verification is federally mandated for Medicaid-covered personal care and home health services, requiring agencies to electronically capture details of each covered visit -- who provided care, for whom, when, where, and what service. States implement EVV through their own systems and vendor rules, so how you comply depends on where you operate and which payers you bill. If you serve Medicaid personal care or home health, EVV is not optional, and your software has to support your state's EVV requirements. This is one of the concrete reasons a Medicare- or Medicaid-billing agency needs a certified clinical and operations system built for these mandates, rather than a general tool.

People are the product in home care, and the hiring and credentialing engine is your real operation. Depending on model and state, that means background checks, verification of certifications for aides or nurses, health screenings, training and competency records, and ongoing tracking of credential expirations so no caregiver works out of compliance. Turnover in caregiving is high, so recruiting is continuous, not a one-time push, and onboarding has to be fast and repeatable. Build the credential-tracking discipline from day one; an agency that loses track of a lapsed certification or an expired background check has both a compliance problem and a liability problem. HR software that tracks staff records, documents, and expirations beats the spreadsheet that quietly falls out of date.

Your payer mix follows your model. Private-duty agencies commonly bill private pay, Medicaid home- and community-based waivers, long-term-care insurance, and the VA, each with its own authorization and billing rules. Medicare-certified agencies bill Medicare under PDGM and often Medicaid, with the heavier claims and documentation load those entail. Set up clean billing and hours tracking before you scale, because home care runs on many small visits and thin margins, and sloppy time capture or slow invoicing shows up fast in cash flow. Understand the authorization rules for each payer you take, and do not assume a payer will backdate authorizations for care you have already delivered.

Match the software to the model, because this is where founders most often overbuy or, worse, underbuild. A private-duty agency's core stack is scheduling that matches caregivers to clients and shifts, HR for hiring and credential tracking, billing and hours capture, and a referral CRM to keep intake full. Deelo covers that on one platform: smart scheduling and client records through Practice Management, caregiver hiring and document tracking through HR, billing and invoicing for private pay and non-Medicare sources, and referral-source management through CRM, all on one subscription with a signed BAA and PHI encrypted at rest. The essential caveat: if you are building a Medicare-certified agency, OASIS assessments, PDGM billing, EVV, and clinical point-of-care documentation require a certified clinical system, and Deelo does not do those and does not replace it. The sensible pattern for a skilled agency is a certified clinical platform for care delivery plus an operations platform like Deelo for scheduling, HR, and referrals. Decide your model first, then buy the clinical system if you need one, then layer operations on top.

Capital and time track your model. A private-duty agency can often open in a few months on modest capital -- licensing, insurance, initial recruiting, and software -- and start billing private pay relatively quickly. A Medicare-certified agency needs far more: the licensing-accreditation-certification path runs many months to over a year, you must operate and treat patients before Medicare revenue arrives, and you need working capital to cover payroll through that gap. Whatever the model, caregiver payroll is your dominant ongoing cost, and thin margins punish weak scheduling and slow billing. Build the operations discipline -- fill shifts, track hours, invoice promptly, keep credentials current -- before you chase volume, because scale multiplies whatever process you start with, good or bad.

Home care and home health are referral businesses, and the agencies that survive their first year are the ones that build referral relationships before they need the revenue. Your referral sources depend on your model: hospital discharge planners and case managers, skilled nursing facilities, physicians, assisted-living and senior communities, elder-law attorneys, and, for private-duty, the adult children who are actually arranging and paying for a parent's care. Each relationship is earned slowly through reliability -- showing up, staffing the shift, communicating when something changes -- and lost quickly through a single missed visit. Treat referral development as a named job, not an afterthought: decide who owns it, track every source and every referral as a pipeline, and follow up on the leads you get instead of letting them go cold. For private-duty especially, families are comparing agencies on responsiveness and trust as much as price, so the speed and clarity of your intake process is itself a marketing asset. Deelo helps on this side: its CRM tracks referral sources and the intake pipeline so nothing slips, its Marketing app runs outreach to referral partners and families, and its Sites builder gives you the professional web presence a discharge planner will check before recommending you. Start these relationships during your licensing and setup period, not after you open, because referral trust takes months to build and you want a pipeline ready the day you can accept clients.