Opening a Home Health Agency

Home Health vs. Home Care Agency

The definition of a home health agency includes providing direct or indirect skilled nursing services and other therapeutic services under a physician’s direction to homebound patients.  Other “therapeutic services” include (but not limited to) physical, occupational, and/or speech therapy; social services; etc.  Please be aware that the requirement for home health agency licensure is based upon meeting the definition of the home health service, and not the source of reimbursement (Medicare, Medicaid, and/or Private Pay) or the frequency (such as only once or twice a year) or volume (such as servicing only one or two clients).  Also, an entity is considered a home health agency whether nursing and/or therapeutic services are provided to a single client collectively and/or separately to individual clients.

In addition, a licensure requirement for “home care” services such as “chore” (house cleaning, shopping, transporting, ironing, washing, etc.) and/or “companion” (physically spending time with a client for socialization and supervision) is being developed and considered for implementation. “Personal Care” services which include staff assisting with dressing changes, medication administration, range of motion, etc. would generally be considered “therapeutic” and home health care.  Staff assisting clients with feeding, bathing, and/or toileting would generally be considered “home care” unless there are specific instructions/procedures involved with the client’s treatment and/or care from the physician and/or therapist involved.  Upon implementation of a “home care” licensure program, separate licenses will be required of any single organization performing both home care and home health.

In the event an agency provides both “home health” and “home care” services, the agency will need to clearly delineate the separate entity home care services from the home health agency clientele especially for Medicare billing.

Hawaii License

Current Hawaii State Law (Hawaii Administrative Rules, Chapter 97) requires anyone operating a home health agency in Hawaii to be licensed by the Hawaii State Department of Health.  Anyone operating a home health agency without a valid license may be subject to civil money penalties and/or imprisonment, and should cease and desist providing those services pending licensure as a home health agency.

The procedure for licensure as a home health agency includes first obtaining an approved Certificate of Need (CON) from the State Health Planning and Development Agency (SHPDA:  Applicants interested in participating in the voluntary Medicare/Medicaid programs will need to obtain an approved CON (public hearing process).  If the applicant is not interested in pursuing federal certification, SHPDA will issue a letter to the applicant indicating there is no need to obtain a CON.

In either situation, the applicant would then submit a copy of SHPDA’s response (an approved CON, or letter indicating that a CON is not necessary) along with a written request to the Hawaii State Department of Health, Office of Health Care Assurance,  601 Kamokila Boulevard, Room 395, Kapolei, Hawaii  96707 for licensure as a home health agency.  Upon receipt, the Office of Health Care Assurance would respond with a written acknowledgement of the application for licensure, and schedule an initial onsite survey with the applicant.

Applicants should assure that they are able to meet all applicable licensing requirements (have written policies and procedures, qualified staff, etc.) at the time of their request for licensure.  A copy of the regulations (Chapter 97) can be obtained from the Department of Health website (

Due to existing contractual obligations, the Office of Health Care Assurance may not be able to accommodate requests for initial licensure for several months from the time of the request.  In addition, applicants will be requested to submit copies of their required policies and procedures to the Office of Health Care Assurance for review prior to the actual initial onsite survey to facilitate the survey process.  See below for a list of items we will require with your license application letter.

  1. Copy of your agency’s policy and procedure manual regarding:  Governing Body, Personnel, Patient Care, Emergency and Disaster Plan, Infection Control, In-service Training, Medical Records, and Overall Facility Program Evaluation Plan
  2. Contracts for services not provided through salaried employees
  3. Licenses/credentials for facility and personnel
  4. Legal name and tax identification number, and DBA
  5. Physical location address, phone, and fax number of the agency
  6. Copy of the agency’s days and hours of operation
  7. Name, address, phone, fax number, and email address of the administrator


The information submitted for review (policies and procedures, contracts, etc.) will be returned at the time of the on-site survey.  The information will be reviewed upon receipt, and you will be contacted if there are any further questions.  In the event the information is in order, an initial on-site survey will be arranged to determine your compliance to the licensure requirements.

Medicare Certification as a Home Health Agency

Once a provider is licensed as a home health agency in Hawaii, the provider may voluntarily elect to participate in the Medicare/Medicaid certification program. Medicare application forms are available on Conditions of Participation are stated in

The benefit of certification is the provider becomes eligible for Medicare/Medicaid reimbursement for serving Medicare/Medicaid beneficiaries.  The goal of the survey and certification process is to determine whether a provider/supplier has systems in place that allow for the provision of services that meet certification requirements.  A Medicare survey will be scheduled only after a provider has admitted a sufficient number of clients to allow the surveyors to make a reasonable judgment as to a provider’s level of compliance.  The initial survey is unannounced and a one-step process with no revisits.  If the survey results in a denial, the initial application process starts anew.  Consequently, any re-application survey should not be expected for up to six months due to other workload priorities.

Upon issuance of a state license, a facility can admit patients but there will be no Medicare/Medicaid reimbursement until the provider/supplier successfully completes the Medicare certification process.  This means passing a Medicare survey with the effective date being either the last day of survey, if no deficiencies were found, or the date in which all deficiencies are corrected if non-Condition level deficiencies were identified.  In other words, the provider must be prepared to admit all private pay clients or absorb the cost of care for any Medicare/Medicaid clients admitted during the time between the licensure and Medicare visits.

A Medicare survey should be requested only when a provider is fully operational; that means, furnishing all services necessary to meet the applicable provider requirements and be able to demonstrate that the various operational systems are in place and working.  An initial Medicare survey will be conducted only when a written request is received and an adequate number of admissions/records are available for review.  If there are insufficient admissions/records to review, the application and request for a Medicare survey will be denied.

While it is impractical to prescribe a specific number of admissions necessary to qualify for a certification survey, it is reasonable to expect a provider to admit some clients after being licensed.  The State Survey Agency will use judgment based on variables such as size of the facility, client population of the geographical area, etc. when determining the number of admissions/records that are needed to indicate a fully operational status.

Although the State Survey Agency will attempt to accommodate all requests for initial certification surveys in a timely manner, the State Survey Agency must do so according to national workload priorities as follows:

  1. Recertification surveys and associated revisits of nursing homes and Intermediate Care Facilities for the Mentally Retarded
  2. Recertification surveys of home health agencies
  3. Complaint investigations
  4. Validation surveys of accredited hospitals
  5. Recertification and associated revisits of non long-term care facilities
  6. Initial certification surveys


Rev. 7/15