How to Become a Medicare Certified Home Health Agency

Why Medicare Certification is Important

Medicare accreditation is the key to long-term success for home health organizations all around the country. Medicare pays for 40% of home health care and helps over 60 million people get it. This means that knowing how to become a Medicare-certified home health agency is not an option—it's necessary for financial stability.

This complete guide is based on our company's experience helping more than 1,500 home care agencies get Medicare accreditation. This roadmap has everything you need to know to get through the certification process, whether you're starting a home health business or adding Medicare services to an existing organization.

What Does It Mean for a Home Health Agency to Be Medicare Certified?

A home health agency that is certified by Medicare is a healthcare organization that the Centers for Medicare & Medicaid Services (CMS) has given permission to provide skilled nursing care, physical therapy, occupational therapy, speech-language pathology, medical social services, and home health aide services to Medicare beneficiaries in their own homes. This federal certification is what sets recognized organizations apart from non-medical home care companies that just provide personal care and companionship.

Medicare Home Health Certification Covers These Services

Medicare-approved home healthcare agencies can charge for:

Skilled Nursing Care: Taking care of wounds, giving medications, keeping an eye on diseases, giving IV therapy, and taking care of catheters

Physical Therapy: Building strength, preventing falls, training for mobility, and recovering from surgery

Occupational Therapy: Training for daily living activities, home safety checks, and evaluating adaptive equipment

Speech-Language Pathology: Evaluating swallowing, treating communication disorders, and cognitive rehabilitation

Medical Social Services: Psychosocial evaluations, coordinating resources, and counseling

Home Health Aide Services: Personal care with skilled supervision

Medicare Certification vs State Licensing

It's important to know the difference between a state home health license and a federal Medicare certification:

State Home Health License:

• Needed to run any home health agency in the state
• Allows serving private-pay clients and private insurance
• Must be gotten BEFORE applying for Medicare certification
• Given out by state health departments

Medicare Certification:

• Permission from the federal government through CMS
• Requires an active state license
• Allows billing Medicare for services to beneficiaries
• Subject to federal Conditions of Participation (42 CFR Part 484)

Important: You can't get Medicare certification unless you already have an active state license. This is a must.

Financial Impact

There are many good reasons for getting Medicare certification:

• Average payment: $2,000 to $4,000 per 60-day episode
• Payment reliability: Predictable rates lower revenue uncertainty
• Referral networks: Hospitals prefer to send patients to certified agencies
• Market access: 60 million Medicare beneficiaries across the country

Real-world example: A home health startup that serves 30 Medicare patients a month makes $60,000 to $120,000 a month from Medicare alone, with payments coming in every 14 to 30 days.

Prerequisites Before You Apply for Medicare Certification

Before starting the process of getting a home health agency certified by Medicare, a few important things must be in place:

1. A Current State Home Health License

Before CMS will look at your application, your agency must have a current, active state home health agency license. There are big differences in the requirements for home health agency licenses:

Normal State Requirements:

• Fill out the whole state application (20-60 pages)
• Administrator credentials that meet state requirements
• Checking the licensure of clinical staff
• A surety bond that costs between $25,000 and $100,000, depending on the state
• Full set of rules and policies
• Checks of the person's background by the state and the FBI
• Fees for applying ($500-$2,000+)

Timeline: Most states take 3 to 6 months to issue a full license. This includes reviewing the application, setting up the survey, doing the first survey, and issuing the license.

Important: States like California may require proof of operating history (36+ months) before you can get Medicare.

2. Demonstrated Operational Capability

Medicare needs proof of real operations, not just paperwork:

• Active patient services: 5-15 or more patients showing that the service can work
• Complete clinical records: Assessment, care planning, and service documentation
• Quality systems that work: The QAPI program with data collecting
• Evidence of policy implementation: Not just papers, but also real-life actions

Expert Advice: Don't rush to apply right after you get your state license. Run the business for two to three months to set up solid systems, train workers well, and fix any problems that come up.

3. Administrator Requirements

Medicare Conditions of Participation set out certain home health agency requirements for administrators:

Pathway 1 - Educational:

• A bachelor's degree from a school that is recognized
• One year of supervised work in home health

Pathway 2 - Experience-Based:

• Experience determined appropriate by the CMS

Note: Some states have stronger rules than the federal minimums. For instance, Texas needs either a bachelor's degree and one year of experience in healthcare or a high school diploma and four years of experience in healthcare (two years of which must be in a supervisory role).

4. Clinical Staff

Before getting certified, make sure you have qualified clinical staff:

• RN Supervisor: Holds a current license and is in charge of all nursing and coordinated services
• Licensed Clinical Staff: RNs, LPNs, PTs, OTs, and SLPs, depending on the state
• Home health aides: Must have at least 75 hours of training that meets federal standards

5. Complete Policies and Procedures

Your home health agency policies and procedures must include all of the Conditions of Participation topics:

• What patients can and can't do
• Full assessment processes (OASIS)
• Planning and coordinating care
• Checking the quality of care and making it better
• Preventing and controlling infections
• Meeting professional service standards
• Being ready for emergencies
• Managing staff
• Keeping clinical records

6. Financial Readiness

Keep enough money on hand for certification charges and running the home care business:

• Surety bond: $50,000 or more (annual premium: $500 to $2,000)
• Total cost of certification: $15,000 to $30,000
• Operating capital: It is best to have enough money to cover 3 to 6 months of expenses
• Professional liability insurance: $1-2 million in coverage
• General liability insurance: Coverage for businesses

7. Technology Systems

Medicare-certified agencies need particular software:

• Systems that can use OASIS: WellSky, Axxess, AlayaCare, and MatrixCare
• Budget: $100 to $300+ per clinician per month
• Electronic health records: Full clinical documentation
• Hardware: Tablets for recording information at the point of care

The 7-Step Medicare Certification Process

Total Timeline: 4 to 8 months from signing up for PECOS to starting to bill

Step 1: Get Your State License (Already Required - 3 to 6 Months)

Before starting the Medicare process, you need to get an active state home care agency license. Check if the license is still valid and has no restrictions.

Step 2: Sign Up for Medicare Through PECOS (2-4 Weeks)

Fill out Form CMS-855A using the Provider Enrollment, Chain, and Ownership System:

Required Documentation:

• Copy of the state license certificate
• Business papers and articles of incorporation
• Financial statements and a surety bond of $50,000 or more
• Disclosures of ownership (for everyone with a 5% or more interest)
• Disclosures of criminal history
• Documents for the compliance program

Common Mistakes That Cause Delays:

• The business names on the state license and the application don't match
• The ownership information is incomplete
• The license documents have expired
• The needed signatures are missing
• Not enough financial records

Processing Timeline: Two to four weeks for full applications. When CMS approves a provider, they give them a Provider Transaction Access Number (PTAN).

Important: PTAN by itself doesn't give you permission to use services. First, you need to pass the certification survey.

Step 3: Contact the State Survey Agency (1-2 Weeks)

After PECOS gives its approval, get in touch with your state's survey organization to ask for a Medicare certification survey:

Survey Fees by State:

• Low-cost states: Texas, Arizona, and Georgia ($2,500-$4,000)
• Mid-range states: $4,000 to $6,000 (most states)
• High-cost states: $6,000 to $10,000+ (California, New York)

Survey Scheduling: Most states give 4 to 8 weeks' notice of the survey date.

Step 4: Get Ready for the Initial Survey (4 to 8 Weeks)

Use this important time to get ready:

Mock Surveys: Highly recommended—find and fix problems before real surveyors show up.

Organizing Documents:

• Review of clinical records (8-12 patient files)
• Employee files with up-to-date credentials
• OASIS reports and data on quality improvement
• A book of policies and procedures
• Plan for being ready for emergencies

Staff Training: Make sure all employees know how to follow the Conditions of Participation.

Step 5: Complete the Initial Certification Survey (1 Day)

State surveyors, usually two or three professionals, do a full evaluation on site:

Survey Components:

• Look at the clinical records of 8 to 12 patients
• Interviews with staff (administrator, RN supervisor, clinicians, aides)
• Evaluation of policies and procedures
• Inspection of the physical facility
• Evaluation of the quality improvement program

Surveyor Focus:

• The safety of patients and the quality of care
• The accuracy and completeness of documentation
• Checking the skills of staff
• Systems for supervision (particularly aide supervision)
• Practices for controlling infections

Texas agencies: HHSC does two surveys to check that both state and federal standards are being met.

Step 6: Fix Any Problems (Varies: 10 to 60 Days)

If surveyors find problems, they must send forward a plan of correction within ten days:

The Plan Must Include:

• Specific steps to fix each problem
• Person in charge of putting it into action
• Timeline with due dates
• Procedures for keeping an eye on things to stop them from happening again

Deficiency Types:

• Condition-level: Serious non-compliance that needs to be fixed right away and a new survey needs to be done
• Standard-level: Gives you 30 to 60 days to fix it

Step 7: Receive Medicare Certification (2 to 4 Weeks)

After fixing the problems or passing the survey:

• CMS gives the green light for certification
• PTAN is turned on for billing
• Certification usually goes back to the date of the survey
• Start sending Medicare claims to MAC

First Payments: 14 to 30 days after a clean claim is sent in

Costs of Getting Medicare Certification

Make sure you budget correctly for full certification:

• State survey fee: $4,000 to $6,000
• Surety bond: $500 to $2,000 a year
• Consultant fees: $5,000 to $20,000 (recommended)
• Getting ready and training: $2,000 to $5,000
• Legal and compliance: $2,000 to $10,000
• Background checks and licenses: $500 to $1,500

Total Investment: $15,000 to $30,000

ROI: Because of increased payment rates, most agencies make back this money within the first 5 to 10 Medicare patients.

Common Reasons Certification Applications Are Denied

Documentation Deficiencies:

• Incomplete PECOS applications
• Credentials that are missing or have expired
• Policies that aren't good enough since there isn't enough evidence that they are being followed

Operational Issues:

• Not enough service history
• Worries about the quality of care
• Signs of financial instability

Compliance Problems:

• Past infractions of rules
• Unresolved problems with the state
• Problems with disclosing ownership

Success Rate: 85-90% of agencies who are well-prepared pass the first certification surveys. When you hire a professional consultant, your chances of success go up to 95% or more.

State-Specific Considerations

Requirements are very different from state to state:

Texas: The process is rather simple, and it usually takes 4 to 6 months. The HHSC handles both state and Medicare surveys.

California: Strict criteria for administrators; may need 36 months of operating history; lengthier timetables.

Florida: A large number of Medicare beneficiaries makes for a substantial market potential, with modest restrictions and deadlines.

Key Insight: To get your home health care agency license quickly, you need to know what your state needs for requirements for home health care agency certification.

Maintaining Medicare Certification

Certification is not a one-time thing; it happens all the time:

• Recertification surveys: Every 36 months
• Complaint-based surveys: Can happen anytime
• QAPI requirements: Ongoing quality checks
• Claims compliance: Correct coding and paperwork
• Staff skills: Training and review on a regular basis

Conclusion: Your Path to Medicare Certification

To become a Medicare certified home health agency, you need to prepare carefully, get ready thoroughly, and carry out your plans in an orderly way. Getting a state license and being allowed to bill for services takes 4 to 8 months and requires careful planning, but the benefits—access to over 60 million beneficiaries and steady income make it worth the time and money.

Key Success Factors:

1. Get a strong state license first
2. Make sure you have real operational capability
3. Put money into professional training and practice surveys
4. Give staff a lot of training on what the CoP requires
5. Always be ready for a survey

Over 1,500 home health organizations have gotten Medicare accreditation quickly with our help at HomeCareConsulting.us. Our home health consultants, who are accredited by ACHC and CHAP, will help you through every step of the process.