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So... You Want to Start a Home Care Agency?

Home care is one of the fastest-growing segments of the health and human services industries. Owning a home care agency can provide you with a meaningful and profitable career where you can be your own boss, make your own decisions, and decide your own future.

But like all business ventures, success is never guaranteed. New home care agencies have a high failure rate, particularly during their first years. A successful agency begins with a careful business plan that considers start-up costs, local demand, competition, workforce recruitment, and marketing.

This page is designed to answer common questions about starting an agency and to provide you with links and references to additional information sources.

Where Do I Start?

First, decide what kind of home care agency you want to start. Essentially, there are two models:

Private Pay Agencies accept payment out-of-pocket or arrange for reimbursement through insurances like LTC insurance. In general, these agencies focus on non-medical care such as companions and personal care, though some provide skilled care through nurses and therapists. In Massachusetts, there are few legal barriers to starting a private pay agency.

Medicare Certified Agencies have gone through a rigorous accreditation process that allows them to bill Medicare and Medicaid for medically-skilled services such as nursing and various therapies. Many Medicare Certified agencies also accept private pay for non-skilled services.

More recently, a third model has emerged that allows private-pay agencies to bill some services through the state-funded programs administered by the Executive Office of Elder Affairs (EOEA). Information about the enrollment process – called the Homemaker Notification of Intent to Contract – is available on at www.800ageinfo.com. Once approved and enrolled by EOEA, agencies must then contract with EOEA’s regional subcontractors, which are called Aging Service Access Points. However, acceptance by EOEA is not a guarantee of receiving ASAP contracts.

Which kind of agency you wish to start depends on a variety of factors including your expertise, experience, local demographics, and competition.

One popular strategy is to initially focus on privately-paid care and then later expand to third-party payment once the business is established.

What Regulatory Issues Affect Private Care?

Unlike most states, Massachusetts does not offer a specific license for private pay home care agencies. However, the MA Department of Public Health (DPH), requires that all agencies placing workers in the home conduct a criminal background check (called a CORI) of each worker upon hire. For more information, visit Massachusetts's Criminal Record Check Services.

DPH also enforces regulations regarding patient abuse prevention, reporting, and investigation, including a Nurse Aide Registry that agencies must access to screen all staff.

In the absence of state licensure, the Alliance’s Accreditation Program helps private care agencies in Massachusetts demonstrate that they meet standards similar to those for licensure in other states.

What If I Want to Bill Insurers, Such as Medicare?

Most insurers require agencies to be Medicare certified and comply with the Medicare “Conditions of Participation.” These standards are established by the federal Centers for Medicare and Medicaid Services (CMS); information about them is available at their Home Health Agency Center.

In Massachusetts, the certification process is handled by the Department of Public Health (DPH), Division of Health Care Quality. Mass DPH provides prospective agencies with a package of information on certification and can be reached at (617) 753-8000 or www.mass.gov/dph/dhcq.

The certification process can take as little as several months, though it can also take as much as a year to complete. A certification survey cannot be scheduled until a start-up agency has a record of caring for at least ten patients.

Although DPH oversees the certification progress, federal law delegates the actual review of agencies to three, national “Deemed Status” organizations:

Alliance members are eligible for discounts on either CHAP or ACHC accreditations.

How Do I Get Paid?

Certified agencies can directly bill Medicare and Medicaid for services that meet program coverage requirements. Medicare bills for agencies in Massachusetts are processed by National Government Services at www.ngsservices.com. EOEA also has a resource page for providers.

Other insurers – including health plans and long-term care insurers – have their own authorization and billing requirements (For private pay services, rates and billing procedures are between the agency and client).

How Do I Get Patients?

Massachusetts has a highly competitive home care market. More than 150 Medicare certified agencies operate in the state, and at least 300 private care agencies serving the state’s 356 cities and towns.

Strategies for attracting clients include traditional advertising and outreach to local community groups, physicians, and hospitals. Because the marketplace is so competitive, agencies must be deliver a quality product at a competitive rate. Some agencies also succeed by offering niche services or focusing on under-served markets.

Who Can Help Me After I Launch My Agency?

The Home Care Alliance of Massachusetts is a statewide trade association dedicated to promoting home care as an integral part of the healthcare system. With more than 160 member agencies, the Alliance is the definitive voice for home-based care in Massachusetts.

Among The Alliance offers referral services through its annual directories and on its Find-an-Agency search.

To learn more about the benefits of becoming a member, visit our join page.