The home health agency launch plan
Every step from deciding to opening, in the order it happens, shaped to your situation, with your own numbers beside it. About 48 steps in 8 phases, 23 of them specific to a home health agency. Free to read; ticking steps off and putting in your own numbers come with membership.
The plan48 steps
- 01Not started0/6Fold
Decide with the numbersa week or two
Before a dollar is spent. Most expensive mistakes happen here, and this phase costs nothing.
An agency earns per visit or per period of care, and who pays decides how much.
Typical for one unit is $750,000 to $3,000,000 a year; the owner keeps 8 to 18% of it before paying themselves. If that band does not cover what you need, that is the signal to pause and look again.
~50-60% survive 5 years. Roughly half of new U.S. businesses reach five years.
Twelve questions about your money, time, experience and temperament, scored. Then the 5 questions this business asks of its owner, about the hours and the work. Answer both before you spend a dollar.
Rule of thumb: if you can buy a certified agency that is past its 36-month window, has a clean survey history, several referral sources and a Medicare share you can verify in the claims, buying buys... Answer it in your situation above and the plan reshapes.
Customers, prices, rent, staff pay, what it costs to open. We filled in typical numbers; change what you know and everything on this page follows.
- 02Not started0/5Open
Plan the moneya week
What it costs to open, where the money comes from, and the cushion that keeps you alive until the business pays for itself.
A home health agency is cheap to equip and expensive to start: the kit itself is a small office, a field kit and a charting device per clinician, the licenses, the accreditation survey and the...
The itemized cost to open10 lines
- Field kits, assessment tools & opening consumables: $1,700 to $7,700A nursing bag, cuff, oximeter and scale per clinician plus gloves, dressings and sharps containers
- Charting devices, office computers, phones & EHR setup: $6,000 to $24,700A tablet per clinician, three office workstations, the on-call line and the EHR implementation
- Office furniture, records storage & finish work: $3,800 to $20,700Locking fireproof cabinets, desks, a case conference table, paint and cabling
- Signage, uniforms & badges: $700 to $6,600
- State license, Medicare enrollment & accreditation: $500 to $15,750The license fee, the $750 CMS application fee and the accreditation survey; Lean skips certification at first
- Policy manual, consultant, legal & accounting: $2,900 to $14,500
- Insurance premiums & workers' comp deposit: $2,950 to $12,300
- Recruiting, screening & training: $3,000 to $10,000
- Lease deposits & referral launch: $4,800 to $16,000
- Initial working capital: $150,000 to $400,000Three months of operating costs CMS requires in the bank (about $270k at the default size), plus payroll through the certification ramp; the default plan sets...
Costs start on day one; customers take months. Map the first twelve months of cash so the business does not run out of money while it is getting going.
The business has to earn your pay like any other bill. Set it in your numbers and watch the month it move.
How deals in this business are financed4 lines
- SBA 7(a) loan (Up to 10 yr · partly government-guaranteed)The workhorse for buying a certified agency or funding a startup's opening costs and working capital.
- Seller financing (Often 10-25% of price · 3-7 yr)Common when buying an agency.
- Working-capital line of credit (Revolving · bridges receivables)A revolving line to float payroll between the visit and the payment, and to bridge Advantage plan authorizations and Medicare claim timing.
- Healthcare receivables financing (Advance on receivables)Lenders advance against clean Medicare and Medicaid receivables once the agency is billing.
Most new shops pair an with 10 to 20% of your own cash. Know the monthly payment before you look at a single space.
Before you shop. A lender tells you what they would fund, what they need from you (credit, your cash in, a plan with numbers), and a pre-qualification letter makes a landlord or a seller take you seriously.
- 03Not started0/4Open
Set up the companya day or two
A day of paperwork, and it has to come before the space: a lease, a loan application and every permit are in the company’s name.
Your state’s business name search, the trademark register, and the domain, before the name is on a sign, a van, or a lease.
A , an , and the S-corporation election each change what you keep and what you are exposed to. Compare them with the numbers, confirm with a CPA and an attorney, then file with your state.
After:The is free from the IRS in minutes once the company exists. The bank account needs both. Keep business money separate from day one.
After:Pick the accounting software and connect the bank account now, so every cost of opening is captured and the numbers you later are real.
- 04Not started0/4Open
The territory and the vehiclea week or two
A home health agency has no storefront; it has a service area it files with the state and a set of referral sources inside it.
What decides it for this business: hospitals, physician groups and facilities discharging daily, large older population still on traditional medicare, not already crowded with agencies, nurses and therapists who live in the territory, drive times that allow 5 or more visits a day.
Mobile businesses still answer to city rules: where the vehicle can be kept overnight, whether you can run the business from home, and what the state licenses.
The van or truck is the shop. Price it, outfit it, insure it, and brand it before the first job. The quotes go into the loan application.
Commercial auto for the vehicle, for the work. Customers and any lender will ask for the certificate.
- 05Not started0/2Open
Get the loanfour to eight weeks
Four to eight weeks with an SBA lender, longer if the file is incomplete. Everything else waits on this, so send a complete file.
Your plan with numbers (download it as a PDF from this page), the company’s papers, the vehicle and equipment quotes, your personal financial statement, and proof of the cash you put in.
The lender funds against the quotes and the insurance; the money goes to the vendors and the build.
After:
- 06Not started0/12Open
Permits and the vehicletwo to four weeks
A home health agency is one of the most regulated small businesses you can open: a state license, Medicare enrollment with a capitalization test, a certification survey, quality reporting and state visit verification...
Bind the policies you had quoted before a contractor, a vehicle or a customer is in play. Keep the certificates; the landlord, the lender and the city will ask.
After:With the money in hand: the vehicle, the , the branding, and the state inspection most cities require before it can work.
After:City or county registration, and a DBA filing if you trade under a name other than the company’s.
With your state, before the first taxable sale. Usually free and online; check your state.
Register the entity, obtain the federal tax number and a National Provider Identifier for the agency.
Enroll through PECOS with the $750 application fee, and prove initial reserve operating funds covering about three months of , at least half non-borrowed, in the...
Register for the quality reporting system and complete a successful OASIS test transmission before the survey.
Enroll with the state Medicaid program and managed care plans, and use the state's EVV system or a certified vendor for home health visits, as federal law requires.
Submit OASIS quality data and contract an approved HHCAHPS survey vendor; agencies that miss quality reporting lose 2 points of the annual Medicare update.
License verification, criminal background checks as the state requires, and an OIG exclusion check on every employee at hire and monthly after.
Privacy and security policies, a risk analysis, device encryption for the tablets in cars, training and business associate agreements with the EHR and billing vendors.
Professional and , non-owned auto, workers' comp, and in some states a surety bond for the license or for Medicaid participation.
- 07Not started0/9Open
Set up to runduring the build
During the build, so the business runs from day one: the systems, the prices, the people and the routine.
The backbone: intake, the OASIS assessment, plans of care, point-of-care notes, visit verification and claims in one system.
Outsourced coders and OASIS reviewers catch the errors that lower a period's payment or trigger a denial.
The state application, the 855A, the capitalization proof, the OASIS test file and the accreditation survey are a year of steps in a fixed order.
Clinicians are paid per visit, per hour or salaried, with mileage reimbursement and on-call pay on top.
Clinicians give injections and wound care in homes and drive their own cars to get there.
See the price the the business needs implies, then check it against what the market pays.
Early morning: Intake works the referrals that came in overnight: verify insurance... Daytime: Clinicians drive their territories: 4 to 7 visits each, with the... Midday: The director of nursing reviews new OASIS assessments and plans of...
Opening, closing, the sale, the complaint, the cash. One page each. This is the manual a franchise would have sold you.
Free, and it is how most people will find you. Address, hours, photos and the menu or price list, live before opening day; then the sign, the soft opening and the first regulars.
- 08Not started0/6Open
Open and measurethe first ninety days
You own it. Now run it on the numbers.
Friends, neighbors and a short menu or list. Find the problems while the room is forgiving.
Enter the real numbers and see every cost line against the for this business.
Clinician and visit productivity; The office payroll you carry before volume arrives; Payer mix drift.
Wages are the start: , insurance, training time and the hours you stop billing. Register as an employer and carry workers’ comp before the first payday.
Growth consumes cash before it produces it. Find the rate your own cash funds before you push.
A certified home health agency is a sellable asset, and larger ones draw private-equity-backed and hospital-owned buyers.