How to start a home care agency
Step 1 — Choose your model
Decide whether you will provide non-medical home care (personal care, companionship, homemaking) or medical home health (skilled nursing and therapy). Non-medical agencies generally face lighter licensing than skilled home health, though many states still require a home care license or registration. This choice shapes everything that follows.
Step 2 — Form the business and get licensed
- Form a legal entity (LLC or corporation) and obtain an EIN.
- Apply for the home care license or registration your state requires — requirements and agencies vary by state.
- Secure required insurance (general liability, professional liability, workers’ compensation, bonding).
- Establish the policies and procedures your state expects (background checks, care standards, complaint handling).
Step 3 — Decide on payers
If you plan to serve Medicaid clients, you’ll enroll as a Medicaid provider (often through managed care organizations) and must meet EVV requirements for personal care and home health visits. If you focus on private pay, you skip Medicaid enrollment but take on direct billing to families. Many agencies do both. See the guide to home care and Medicaid billing for how the claim cycle works.
Step 4 — Hire and credential caregivers
Recruit caregivers, run background checks, and track the credentials your state and payers require. Turnover is high in home care, so a smooth onboarding and accurate scheduling and pay matter from the start.
Step 5 — Put your systems in place
Choose software to run intake, scheduling, EVV, care plans, billing and payroll. Adopting a connected platform early avoids the painful migration of stitching point tools together once you have clients and caregivers on them. Tunzly is built for exactly this — a home care CRM and operating system in one.
Frequently asked questions
Do I need a license to start a home care agency?
Most states require a license or registration to operate a home care agency, and the exact requirements differ by state and by whether you provide non-medical or skilled care. Confirm the requirements with your state health department.
What is the difference between non-medical home care and home health?
Non-medical home care covers personal care, companionship and homemaking, while home health includes skilled services like nursing and therapy. Home health generally carries heavier licensing and clinical requirements.
Do I have to accept Medicaid?
No. You can operate on private pay alone, which avoids Medicaid provider enrollment and EVV mandates. Accepting Medicaid expands your client base but requires enrolling as a provider and meeting EVV and billing requirements.
What software does a new home care agency need?
A new agency needs software for intake, caregiver scheduling, EVV, care plans, billing and payroll. Adopting a connected platform like Tunzly early is easier than migrating from separate point tools later.
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