Buying a home care agency in Florida

This covers two different businesses. A home health agency sends nurses, therapists and aides into patients' homes on a doctor's orders, often after a hospital stay. Most of its money comes from Medicare and Medicare Advantage plans, plus Medicaid and private insurance. Medicare pays for each 30-day period of care. Patients usually finish within weeks, so the agency depends on a steady flow of referrals from hospitals, doctors and discharge planners.

A non-medical home care agency (often called private duty or personal care) helps people with bathing, dressing, meals, errands and company, and bills by the hour. Payment comes from families, long-term care insurance, veterans' programs and Medicaid long-term care plans. A client may need help for months or years, so the income repeats, but it ends when the client moves into a facility or dies.

Either way, the caregivers are the business. Most agencies have a small office (an administrator, a nurse who oversees care, schedulers, an intake person, a biller) and a much larger group of aides and nurses in the field, many part time.

• Referrals from many hospitals, doctors' offices, senior communities and case managers, not one or two relationships the owner holds personally.
• A core group of caregivers who have stayed for years, and steady hiring that keeps shifts filled without constant overtime.
• A director of nursing and an office team who run intake, scheduling and billing without the owner.
• For Medicare-certified agencies, clean recent surveys (inspections) and solid ratings on Medicare's Care Compare website.
• For private-pay agencies, long client relationships and a mix of payers, so no single Medicaid plan or insurer controls the business.
• Files that would survive an audit: background screening, training records, visit notes and physician orders, all current.
• Scheduling and visit verification that run smoothly. Florida's Medicaid plans require electronic verification of home health and personal care visits.

Florida's Agency for Health Care Administration (AHCA) licenses this work, and the license type limits what caregivers may do. A home health agency license (part III of chapter 400) covers nursing, therapy and aide services, including hands-on care. A nurse registry (section 400.506) refers nurses, aides and companions as independent contractors and may not supervise them. A homemaker and companion registration (section 400.509) covers chores, meals and company, with no hands-on personal care.

None of these transfers to you. At least 60 days before closing, the seller notifies AHCA and your application must be in. Buying 51 percent or more of the shares counts too (sections 408.803, 408.806 and 408.807). Home health buyers also file a business plan, projections compiled by a CPA, accreditation if the agency gives skilled care, and proof of malpractice and liability coverage (section 400.471). Controlling owners, administrators and caregivers need level 2 background screening (section 408.809).

For Medicare, a change in majority ownership within 36 months of the agency's first enrollment or last sale usually means you enroll as a new agency and need a new survey or accreditation, with narrow exceptions (42 CFR 424.550(b)). Confirm with AHCA, the Centers for Medicare & Medicaid Services and a health care attorney.

• Payers. Medicare rates change yearly, Medicare Advantage plans often pay less and require approvals, and Medicaid plan contracts can end. Florida is part of Medicare's Review Choice Demonstration, which reviews traditional Medicare home health claims before or after payment. Ask for the agency's results.
• Audit history. Records requests, denied claims and repayment demands. The seller stays liable for AHCA penalties from before the sale (section 408.807), but Florida Medicaid can also hold the buyer liable for overpayments identified by closing (section 409.907(6)). Ask AHCA, and cover the rest in the contract.
• How caregivers are paid. Treating aides as contractors outside a licensed nurse registry, or skipping overtime, can leave the business owing back wages. Federal overtime rules for agency caregivers are being revisited, so have an employment attorney look.
• The service area. A home health agency license lists the counties it may serve, all in one state health planning district. Adding counties takes an AHCA filing, and going beyond the district takes a separate license (rule 59A-8.003).
• People. Caregiver turnover, pay compared with local competitors, and any liability claims involving falls or missing property.

• Where do most new patients or clients come from, and which referral sources know you personally?
• Who pays for most of your clients' care, and has any payer changed rates or terms lately?
• How long do your caregivers usually stay, and how do you find new ones?
• When were your last AHCA survey and accreditation visit, and what came up?
• How have your claims fared under Medicare's Review Choice Demonstration? Any audits or repayment requests?
• Who handles intake, scheduling and nursing oversight day to day, and do you think they'll stay?
• Do you turn away any areas or kinds of clients because you can't staff them?