Ask Mike - How can we start our own home health aide business?

Dear Mike,

My sister and I are both great home health aides. The both of us would like to start our own home health aide business. We know how important it is for the family to get the best for their loved ones. We were wondering, do you know how we can get this business started?

Thanks for your time.

Future Home Health Proprietors

Dear Future Home Health Proprietors,

Best of luck with your endeavor. Your question may be fairly straightforward, but the answer, unfortunately, is extremely complex. I can offer advice on the home health part, but for the starting of a business side, you should seek out other expert advice.

As far as the home health part, go to the Medicaid Agency contact information page for your state. Ask your Agency for assistance with whatever kind of application and/or other requirements that are needed to provide the service. Depending on your state's requirements, it may be necessary to be a licensed home health provider. On the other hand, it may not be necessary to be a licensed home health agency to be provider of the in-home services you are wanting to start up. You may need to comply with your state health department rules in order to go into business. All of this varies widely from state-to-state. In any case, you will need to comply with your state's licensure rules and with Medicaid Home and Community-based Services (HCBS Waiver)/Personal Care Option (PCO) provider contractual obligations.

Concerning the business part, here are a few considerations, but you should check with experts:

  • Think about how you want to structure your business. I assume that you will want the protections of incorporating so consider whether you want to set up a for-profit or not-for-profit company. At this point, you will need an attorney or at least someone knowledgeable in the pros and cons of the various types of corporate structures of the or-profit and not-for-profits worlds. I really think you will need a lawyer with expertise in this area.

  • You will have start-up costs such as equipment, rent, insurance, etc. and, in particular, wages that will need to be covered before you can expect to receive any payment for services rendered. You should prepare a budget (and I urge you to get expert advice) of these expenses so you can see how much cash on hand you will need or so you can (as is most likely) apply for a small business loan for start-up costs. Your state Medicaid agency can probably help you with finding out how long it takes to get reimbursed once a claim is submitted.

It is complicated, difficult and risky to start a small business, especially from scratch. While I don't want to necessarily dissuade you from this idea, you should know that, in general, the vast majority of small business starts, both for-profit and not-for-profit, end up failing. In order to best avoid this result, I repeat that you should obtain expert legal and financial advice for this endeavor.

Best of luck to you.

Mike Oxford

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