Home Health Agency License Requirements by State
Last updated: 2026-03-31
Starting a home health agency requires state licensing, and if you want to bill Medicare or Medicaid, you'll also need CMS certification and accreditation. The process is more complex and expensive than most small businesses — here's everything you need to know.
| License / Certification | Required? | Typical Cost | Details |
|---|---|---|---|
| State Home Health License | Required | $500 - $5,000 | State-specific application, background checks, and facility/policy review. |
| Medicare Certification (CMS) | Required for Medicare billing | $10,000 - $50,000 | Accreditation + CMS approval process. 6-18 months. ~70% of industry revenue. |
| Accreditation (ACHC, CHAP, or JC) | Required for Medicare | $3,000 - $15,000 | Comprehensive survey of policies, procedures, and patient care standards. |
| Medicaid Enrollment | Required for Medicaid billing | $0 - $500 | Separate enrollment in each state's Medicaid program. |
| Surety Bond | Required (most states) | $500 - $5,000/yr | $15,000-$100,000 bond. Protects patients and state against fraud. |
| NPI Number (National Provider ID) | Required | Free | Unique 10-digit number for Medicare/Medicaid billing. Apply through NPPES. |
| Business License | Required | $50 - $400 | City/county business license to operate. |
Steps to Start a Home Health Agency
- Choose your service model — Decide between skilled home health (Medicare-eligible) or non-medical home care. This determines licensing complexity and revenue potential.
- Form your business entity — LLC or corporation. Apply for EIN. Open a business bank account. Many states require a specific corporate structure for healthcare businesses.
- Apply for state licensure — Submit your application, policies & procedures manual, administrator qualifications, and background checks to your state health department. Processing: 30-120 days.
- Develop policies & procedures — Create comprehensive clinical and administrative policies. Required for both state licensing and accreditation. Include infection control, emergency plans, patient rights, and HIPAA compliance.
- Obtain accreditation — If pursuing Medicare, apply for ACHC, CHAP, or Joint Commission accreditation. The survey evaluates your policies, staff qualifications, and readiness for patient care.
- Apply for Medicare certification — Submit CMS-855A form. CMS will schedule a state survey to verify compliance with Conditions of Participation. Processing: 3-12 months.
- Enroll in Medicaid — Apply separately in each state where you'll provide services. Requirements vary by state.
- Hire & train staff — Recruit administrators, RNs, therapists, and home health aides. Ensure all staff meet state and federal training requirements.
State Home Health Licensing Requirements
Select your state for specific home health agency licensing requirements and fees.
AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareDistrict of ColumbiaFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming
Frequently Asked Questions
How much does it cost to start a home health agency?
Startup costs typically range from $40,000-$350,000 depending on your state, service type, and whether you pursue Medicare certification. Major costs: state licensing ($500-$5,000), Medicare certification and accreditation ($10,000-$50,000), surety bond ($15,000-$100,000 bond, cost $500-$5,000), insurance ($5,000-$20,000/year), office setup ($2,000-$10,000), and initial staffing. Non-Medicare agencies can start for $40,000-$80,000.
What is the difference between a home health agency and a home care agency?
Home health agencies provide skilled medical services (nursing, physical therapy, occupational therapy, speech therapy) usually under a physician's order and covered by Medicare/Medicaid. Home care agencies (also called non-medical home care) provide personal care, companionship, meal prep, and light housekeeping — no clinical services. Licensing requirements are significantly different.
Do I need Medicare certification?
Medicare certification is not required to operate a home health agency, but it is required to bill Medicare and most Medicaid programs. Given that ~70% of home health revenue comes from Medicare/Medicaid, most agencies pursue certification. The process takes 6-18 months and requires accreditation by an approved body (ACHC, CHAP, or Joint Commission).
What are the staffing requirements?
Medicare-certified agencies must have: a qualified administrator, a supervising physician (or medical director), registered nurses (RNs), and a compliance officer. Staff-to-patient ratios vary by state but typically require at least one RN per 50-60 patients. Home health aides must complete 75+ hours of training and pass a competency exam.
How long does the licensing process take?
State licensing: 30-120 days. Medicare certification: 6-18 months (includes accreditation survey, CMS application, and state survey). Total from start to accepting Medicare patients: 9-24 months. Non-Medicare home care agencies can be licensed in 30-90 days in most states.
What accreditation do I need?
For Medicare certification, you need accreditation from a CMS-approved body: ACHC (Accreditation Commission for Health Care), CHAP (Community Health Accreditation Partner), or The Joint Commission. Accreditation costs $3,000-$15,000 and involves a comprehensive survey of your policies, procedures, and patient care.
What insurance does a home health agency need?
Required: general liability ($1M+), professional liability/malpractice ($1M+), workers compensation, commercial auto (if using vehicles for patient visits). Recommended: cyber liability (for patient data), employment practices liability (EPLI), and a surety bond (required in many states). Total insurance costs: $5,000-$20,000/year.