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Guide to Opening a Home Health Care Organization In California

Male doctor holding a stethoscope

You must learn the basics on how to open a home health care business in California if you plan to become involved in the home health industry.

A passion for providing quality health care to elderly people and invalids can inspire you to build your home health care agency. However, you also need practical knowledge if you are serious about obtaining a home health license in California for your organization.

What Is a Home Health Care Agency?

A home health care agency is a business that offers a broad range of home health care services for senior citizens, persons with disabilities, and other homebound patients. The agency sends medical professionals or caregivers to provide care and assistance to individuals in their own homes.

Home health care is designed to be more cost-effective and convenient compared to the health care provided by a skilled nursing facility (SNF) or a hospital. Some home health care benefits may be covered by Medicare, depending on the Medicare health plan or insurance policy of the patient.

Two Types of Home Health Care

There are two main types of home health care that an agency can provide.

Medical Home Health Care

Medical home health care typically includes nursing services, wound care, health status monitoring, nutrition therapy, mental health care, injections, and more. Licensed medical professionals are qualified to administer this type of home health care.

Home Care

Home care commonly involves basic daily assistance for routine tasks, such as bathing, dressing, oral hygiene, simple exercises, meal preparations, house maintenance, and more. Home care is usually carried out by professional caregivers.

Three Types of Home Health Care Agencies

There are three types of home health care agencies:

Public Agency

A public agency is a home health care provider that is operated by the local or state government. These include county hospitals and state-operated home health care agencies.

Nonprofit Agency

A nonprofit agency is a private agency that is exempt from federal income taxation. It is usually funded and supported in part by private philanthropic sources like foundations and charity institutions. Nonprofit agencies also include nonprofit hospitals and visiting nursing associations.

Proprietary Agency

A proprietary agency refers to a private, profit-making agency. Profit-making hospitals also fall under this category.

Your future home health care business will most likely be considered a proprietary agency, but it also depends on your particular plans and preferences.

What Are the Requirements to Start a Home Health Agency in California?

You need to follow specific steps and meet certain requirements, so you can start your own home health care agency in California.

1. Formulate a Business Plan

First, you need to create a strategic business plan for your home health care agency before you proceed to the next steps. This will be the solid foundation for the rest of the startup process.

An ideal business plan will include basic information about your company, company description, products and services, marketing campaign plans, management structure, operational procedures, and financial plans.

2. Set Up Your Business Entity

Once you are done planning and brainstorming, it’s time for you to officially set up your business entity. Choose the business structure that will suit the purpose of your home health care agency:

  • Sole proprietor
  • Partnership
  • Limited Liability Company
  • S Corporation
  • C Corporation

You may need the professional advice of a lawyer or a Certified Public Accountant (CPA) to determine which business type is best for your agency.

3. Get a Federal Employer Identification Number (EIN)

You need to apply for a Federal Employer Identification Number (EIN) from the Internal Revenue Service (IRS) using the IRS Form SS-4.

This EIN number is comparable to your personal Social Security Number (SSN) in terms of tax liability for your home health care business.

Gavel sitting on top of a wooden pad

4. Register Your Business with the State of California

Ensure that your home health care agency is legitimate by registering your business in the state of California.

Complete the application requirements for your home health license in California. Register for a National Provider Identification (NPI) number as well.

After you have successfully registered with the state, your agency will be qualified to receive payments from Medicare and Medicaid.

5. Achieve Medicare and Medicaid Certifications

Medicare and Medicaid certifications enable your agency to offer health care services that are covered by Medicaid and Medicare plans.

Explore the CMS website to learn the details of the accreditation process.

6. Make Financial Preparations

You need to set up your business funds properly, so you can efficiently operate your home health care agency.

Create a business checking account and a credit card account to keep your business finances separate from your personal finances. If you need additional funds, you have the option of applying for business loans to cover startup costs.

It’s also a practical idea to create a digital accounting system, so you can easily monitor and manage the future income and expenses of your new venture.

7. Create a Policy and Procedures Manual

A comprehensive Policy and Procedures Manual can be instrumental in creating a smooth, consistent workflow for your home health care agency.

You have the option of purchasing a manual if you find one that is generally applicable to your business. However, creating a manual from scratch allows you to customize it to meet the specific needs of your agency.

This manual typically covers various procedures and policies involved in the daily work operations of your business. Some examples of topics are new client admissions, orientation, care plans, scheduling, payroll, employee training, client billing, and more.

8. Hire Caregivers and Medical Professionals

Your staff is the cornerstone of your home health care agency. The quality of home health care that they provide to patients can influence the credibility and growth of your organization.

Invest effort in searching for excellent caregivers and medical professionals who are caring and competent. Take time to review their resumes, interview them, and contact their references, so you can hire staff members who will be an asset to your team.

You can request referrals from your trusted colleagues in the healthcare field. You may also feature employment ads on online job sites, community boards, and local newspapers.

Nurse doing work at her computer with a stethoscope next to her

9. Build Your Official Website

Your official website will be one of the first things that your potential patients will check out if they are interested in your home health care services.

You need to build a website for your business to increase your online presence and gain new clients.

A well-crafted website should be visually attractive, easy to navigate, and quick to load. It should include landing pages that will contain all the basic information about your organization that is relevant to your customers.

10. Apply Marketing Strategies

Once your home health care business is up and running, consider using marketing strategies to promote your agency.

Make social media accounts for your organization to increase brand awareness. You can take advantage of Pay-Per-Click (PPC) advertising to reach a wider audience. You can also use SEO techniques when you write blog posts for your official website.

Marketing strategies can contribute to the future success of your home health care business.

At this point, you already know how to start your own home health agency in California. However, before you proceed to the other steps, it’s a smart choice to consult with experts first to ensure that you are on the right track in terms of business planning.

Get Expert Help in California

It’s important to seek sound legal advice if you are serious about learning how to open a home health care business in California.

Our experienced attorneys can guide you on the process involved in starting a home health agency. They can also help you to process all the necessary legal requirements.

Equally as important, Fenton Jurkowitz Law Group can help your home health care staff avoid violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). This is crucial because such violations can potentially harm your business. We can design and implement HIPAA compliance plans for your home health agency. Our firm can handle HIPAA compliance counsel, HIPAA compliance audits, preparation of HIPAA-compliant security and privacy policies, provision of business associate agreements and HIPAA-compliant contracts, breach assessment and notification, and workforce training for your home health care business.

Call us at (310) 444-5244 today if you are interested in getting expert legal services for your home health care business.

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