Everything a Home Health or Hospice Agency Needs

States license home care, home health and hospice agencies, and many separate a licensed-only agency from one certified by Medicare. In North Carolina, for example, the Division of Health Service Regulation licenses home care agencies, a home health agency is a licensed home care agency that is also certified for Medicare and Medicaid, and an agency that wants Medicare certification must first obtain a certificate of need. A licensed-only home care agency there cannot receive Medicare payment.

Certificate of need rules vary widely. In Washington, the certificate of need program requires state approval before a Medicare or Medicaid home health agency or hospice agency is established, under review standards set in the state's administrative code. Other states have no certificate of need for these agencies at all. We confirm the licensing and need rules in your state before you invest, prepare the license application, and coordinate the certificate of need filing with your consultant or attorney where one is required.

Becoming a certified Medicare provider follows a set sequence. The agency submits Form CMS-855A and its supporting documents to its Medicare Administrative Contractor. The MAC reviews it and sends a recommendation to the State survey agency. The State agency or an approved accreditation organization surveys the agency, the State recommends certification or noncompliance to CMS, the MAC rechecks enrollment as needed, and CMS makes the final decision, after which the agency signs a provider agreement.

Accreditation is the voluntary alternative to a state survey. When a CMS-approved accrediting organization finds that an agency meets standards at least as strict as Medicare's, the agency is deemed to meet the Medicare requirements, which CMS calls deemed status. The organizations CMS lists for both home health and hospice programs include the Accreditation Commission for Health Care (ACHC), the Community Health Accreditation Partner (CHAP) and The Joint Commission. Deemed agencies can still be investigated by the State Survey Agency when a complaint is filed.

Home health agencies and hospices both enroll on Form CMS-855A. A home health agency entering Medicare must also show initial reserve operating funds, available from the day the application is submitted until three months after billing privileges are granted, not counting actual or projected Medicare receivables. The amount is built from the average first-year cost per visit of three or more comparable agencies, multiplied by your projected visits for the first three months or by a floor based on the comparison agencies' visits, whichever is greater. Proof starts with account statements and, where the bank offers one, an attestation that the funds are available. The CMS-855A has a dedicated section for these documents.

Ownership changes carry their own rule. If a home health agency or hospice changes majority ownership by sale within 36 months of its initial enrollment or its last majority ownership change, the provider agreement and billing privileges do not transfer, and the new owner must enroll as a new provider and go through a new state survey or accreditation. Exceptions include an agency that has filed two consecutive years of full cost reports, an internal corporate restructuring, a change in business structure with the same owners, and the death of an owner. A home health branch is added as a practice location on the parent's CMS-855A rather than enrolled separately.

Medicare certification is often only the first contract. State Medicaid programs, Medicaid managed care plans, Medicare Advantage plans and commercial insurers each enroll home health agencies and hospices on their own applications and timelines, and each needs your license, certification or accreditation, NPI and ownership details.

We complete and submit every application, follow up until each is decided, confirm effective dates for billing and keep each payer's records current when you add a branch, change ownership or change your tax ID.

Medicare pays home health agencies under the Patient-Driven Groupings Model (PDGM), which pays for 30-day periods of care. Each period is assigned to one of 432 case-mix groups using the patient's clinical characteristics and other information, and each group has its own weight. A period with fewer visits than its group's threshold is paid per visit instead, as a low-utilization payment adjustment.

The patient has to qualify first. The patient must be confined to the home, must have had a face-to-face encounter with a physician or allowed practitioner related to the primary reason for home health, and must be under a plan of care that the certifying practitioner reviews at least every 60 days. The agency submits a one-time notice of admission to its MAC within 5 days of the start of care, and administers the OASIS as part of the comprehensive assessment at the start of care, in the last 5 days of every 60 days, within 48 hours of a return home from a hospital stay of 24 hours or more, and at discharge.

A hospice patient must be certified as terminally ill with a prognosis of six months or less if the illness runs its normal course, be entitled to Part A and sign an election statement choosing hospice care. Benefit periods run 90 days, then 90 days, then an unlimited number of 60-day periods, and an MD or DO must certify or recertify the terminal illness for each one. From the third benefit period on, a physician or nurse practitioner must have a face-to-face encounter with the patient no more than 30 days before each recertification. The hospice files a notice of election with its MAC within 5 calendar days after the election.

Medicare pays hospice by day under four levels of care, and each claim has to show the right one.

An agency that bills electronically is a HIPAA covered entity. The Security Rule requires an accurate and thorough assessment of the risks to the electronic patient information it holds, and a security awareness and training program for the whole workforce, management included. For a home health or hospice agency, that covers laptops and phones carried into patients' homes, the EHR used to document visits, messaging between clinicians and the office, and every vendor that touches patient information.

We run your security risk assessment, write privacy and security policies that fit field staff, train every clinician and office employee at hire and every year, collect business associate agreements and put a breach response plan in place.

The order of steps matters more for a new agency than for most practices. The entity, tax ID and organizational NPI come first; then the state license and any certificate of need; then the CMS-855A with capitalization documents; then the state survey or accreditation visit; then the provider agreement and billing privileges. Payers outside Medicare follow on their own timelines.

We build that timeline with you, prepare each filing in sequence and set up the systems that have to be ready on the first day: EHR and visit documentation, billing, payment processing for private-pay services and the HIPAA program.