The Time is Ripe to Start a Home Health Agency

Every day in the United States approximately 10,000 Baby Boomers turn 65 years old.  This trend is expected to continue until 2030.  The home health market is experiencing explosive growth due in part to the aging Baby Boomers.  According to the Bureau of Labor Statistics over one million jobs will be added in the home health sector through 2020, representing a 69 percent growth rate. While in comparison, only a 14 percent growth rate for all jobs is expected during this same time period.

With this type of anticipated growth there has never been a better time to start a home health agency.  However, are you unsure where to start or what exactly is required?  Our team of experts at 5 Star Consultants are ready to help you.  We put together some of the key factors you should consider during your decision process.

First, the most crucial point to take into account before you start a home health agency is to identify your source for patients.  As a benchmark, you will need a minimum of 40 to 50 patients to just break even.  In addition, your initial investment potentially could run $300,000 – $400,000, which may require obtaining a line of credit.  Are you ready for this type of commitment?   If so, then read on.

Next, not only is starting a certified and accredited home health agency for Medicare and Medicaid costly, but it is also very time consuming.  Becoming a certified and accredited home health agency can be rewarding, but the process can take up to two years to accomplish.  After you receive your state license and complete your 855 for Medicare your next step is to begin the accreditation process with one of the three following accrediting bodies:

  • Accreditation Commission for Health Care (ACHC)
    Started in 1986, the ACHC is a national, non-profit organization that offers voluntary accreditation programs for different types of providers, including home health and hospice agencies.  Further information can be located at:
  • Community Health Accreditation Program (CHAP)
    Founded in 1965, CHAP is the oldest community-based accreditation program and accrediting body in the nation.  It has “deeming” authority granted by CMS to decide whether a home health agency meets their quality standards and the Medicare Conditions of Participation.  Further information can be located at
  • The Joint Commission (TJC)
    The largest, independent, and not-for-profit healthcare accrediting organization, which was founded in 1951.  Currently, it evaluates and accredits nearly 21,000 healthcare organizations in the United States.  A home health agency must undergo an on-site survey by the Joint Commission survey team at least every three years in order to earn and maintain the Joint Commission’s Gold Seal of Approval®.  Further information can be located at

You must submit an application to one of the accrediting bodies listed above.  In addition to the completed application, a fee must be paid before the process begins.  Unless you have experience with the application process it can seem overwhelming.  Our team at 5 Star has experience with each accrediting body and can assist you with completing and submitting your applications.

You will need a policy and procedures manual to ensure that your organization follows the standards of the accrediting organization.  Each accrediting body has different standards.  To help with this process, we provide many different manuals available for purchase on the manuals page of our website.

The next step is to actually begin the hiring and training of your staff.  When hiring for the positions of administrator and Director of Patient Services we advise that the selected candidates have healthcare experience.  You and your entire staff need to be well versed on your state’s laws and the Medicare Conditions of Participation.  However, 5 Star also provides training services that can help with those new to the industry or just need a refresher course.  Our services page includes information on the different training options we offer.

Now you will begin providing service for “free” patients.  This is required for Medicare certification.  Before a surveyor visits your agency you must have treated at least ten patients and have seven currently on service.  These patients must qualify for Medicare services, but you may not bill them; therefore, this could be quite costly for a new agency.

Before the real survey is performed 5 Star Consultants can conduct a mock survey with your team.  Many of our employees are former or current surveyors, and experts at ensuring your agency is prepared for the real survey.  Once your agency passes the actual survey it can start billing Medicare.  Again, you want to make sure that the candidate you hire for your billing position or the billing service you retain has experience with home health billing in particular.

Starting a home health agency is a huge commitment, and it can be even more overwhelming if you and your team are not very familiar with the healthcare industry.  However, our team of experts at 5 Star Consultants can assist you with every step of the start-up process, and continue to guide you after your agency is launched.  We offer onsite training, webinars, manuals, coding, and consulting on many different facets of home healthcare and hospice care.  Contact us today so we can start helping you build your agency of tomorrow.

Sources:  AARP website and U.S. Bureau of Labor Statistics website.

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