Should You Add Skilled Home Care Services to Your Agency?

You’ve built a successful home care agency. Your caregivers are reliable. Your operations are humming. Your clients trust you. Home care services focus on non-medical support, such as assistance with daily living activities, while skilled home care services provide medical care delivered by licensed professionals. home care clients

Now, you’re thinking about what’s next. Should we expand into skilled care? Should we add a home health component? Expanding your services can help you better support families and ensure their loved one receives the right level of care as their needs change.

You’re not alone—many private duty agencies are exploring ways to grow their services, deepen their impact, and meet more client needs. Offering both non-medical and skilled care under one roof sounds like a natural progression. But here’s the truth: it’s not just an upgrade. It’s a complete shift in how your business operates. If you’re considering the jump into home health, here’s what you need to know before taking the leap. Scheduling an appointment for a consultation or assessment is often the first step to determine how your agency can best serve new and existing clients.

1. The Regulatory Landscape Is Completely Different

In private duty care, most of your compliance burden sits at the state level. When you add home health, you’re stepping into federal regulation territory, with oversight from CMS, accreditation bodies, and strict clinical documentation standards. Formal contracts with organizations such as the VA are often required to deliver skilled home care services, ensuring a structured partnership and compliance with federal requirements.

You’ll need to prepare for:

• Clinical chart audits
• Ongoing quality reporting
• Survey readiness
• Medicare rules that evolve constantly (including hospital insurance, or Medicare Part A, which plays a key role in coverage and compliance requirements)

If you’ve never operated in this environment, it can feel overwhelming without the right support team.

2. You’ll Need Clinical Staff and Leadership

Home health doesn’t just mean “more care”—it means licensed care. You’ll need a Director of Nursing (DON) to oversee clinical operations, as well as RNs, LPNs, nurse practitioners, and potentially therapists, depending on your service lines. Physical therapists are essential for providing rehabilitation services as part of skilled home care.

This may require a cultural shift, especially if your team has mostly managed personal care aides and companions. And keep in mind: recruiting licensed clinicians is a challenge in today’s workforce environment.

3. Billing Is a Different Ballgame

The way you bill for home health is entirely different from private pay or Medicaid waiver billing.

You’ll encounter:

• OASIS assessments
• Medicare episodes (PDGM)
• RAPs and NOAs
• Strict submission deadlines

The cost of skilled home care services is often covered by Medicare, Medicaid, or private insurance, and in many cases, the cost to the patient can be minimal. One benefit of Medicare coverage is that eligible patients can receive a wide range of home health services, and Medicare pays for many of these services, though some items or services may not be covered. Additionally, Medicare Part D may help cover certain medications or services related to home health care.

Missing a deadline or getting documentation wrong can delay or reduce your reimbursement. If your billing team is set up for home care, they may not be prepared for the shift—unless you bring in a home health billing partner or build out a new internal workflow.

4. Your Referral Sources Will Change

Expanding into skilled care doesn’t guarantee more referrals. In fact, it can be harder to earn trust in the home health space. Hospitals and discharge planners, as well as skilled nursing facilities, often refer to preferred partners they’ve worked with for years. You’ll need to prove that you can deliver excellent care and stay on top of documentation, compliance, and communication.

It’s important to talk with hospital staff and skilled nursing facility coordinators to build strong referral relationships and ensure they understand the quality of your services.

Building these relationships takes time, and you may not see results immediately.

5. The ROI Takes Longer

Home health has the potential to be profitable—but it’s not a quick win. Between staffing costs, documentation requirements, and delayed reimbursements, your financial return may take months (or longer) to materialize. In many cases, providing skilled home care services can reduce the need for extended hospital or rehabilitation center stays, which can improve cost-effectiveness and ROI.

Many agencies underestimate how long it takes to get fully up and running—and how much cash flow is required to sustain the operation until payments start coming in.

6. Assessing Client Needs: The Importance of a Thorough Needs Assessment

Before launching skilled home health care services, it’s essential to start with a comprehensive needs assessment for every client. This process goes far beyond a simple intake—it’s about understanding the full spectrum of a patient’s medical needs, personal care needs, and eligibility requirements for home health benefits, including Medicare coverage.

A skilled nurse or social worker typically leads this assessment, evaluating the client’s health status, daily living challenges, and safety risks. They’ll work with the client, family, and care team to develop a personalized care plan that may include skilled nursing care, occupational therapy, physical therapy, or speech therapy, depending on the patient’s unique situation.

This thorough approach ensures that all necessary health care services are identified and coordinated, supporting recovery, independence, and quality of life. It also helps providers meet regulatory standards and maximize coverage for eligible services. Ultimately, a robust needs assessment is the foundation for delivering high-quality, patient-centered home health care that adapts as the client’s needs evolve.

7. Expanding Your Service Mix: Therapy and Rehabilitation Services

Adding therapy and rehabilitation services to your agency’s offerings can significantly enhance the value you provide to clients. Services like physical therapy, occupational therapy, and speech therapy are vital for patients recovering from illness, injury, or surgery, helping them regain strength, mobility, and independence.

Intermittent skilled nursing care and rehabilitation support are also crucial for clients managing chronic illness or complex medical needs at home. By integrating these services, your care team—including home health aides and skilled nurses—can deliver a more holistic approach, addressing both medical and functional goals.

Many of these therapy and rehabilitation services are covered by Medicare and other insurance providers, making them accessible to a broader range of clients. Expanding your service mix not only improves patient outcomes and quality of life but also positions your agency as a comprehensive provider of home health care, ready to support clients through every stage of recovery and rehabilitation.

8. Defining Your Service Area: Boundaries, Logistics, and Growth

Clearly defining your service area is a strategic step for any home health agency looking to expand into skilled care. Your service area determines where you can deliver high-quality health care services, including skilled nursing care, wound care, and other specialized medical needs.

When setting these boundaries, consider factors like geographic reach, population density, and the availability of resources such as skilled nurses and therapists. A well-defined service area helps you manage logistics, allocate staff efficiently, and ensure timely access to care for your clients.

It’s also important for compliance—Medicare and other payors often have specific eligibility requirements tied to service location and coverage. By establishing clear service area parameters, your agency can better manage growth, maintain quality standards, and meet the increasing demand for home health care services. As your agency evolves, regularly reassessing your service area will help you scale responsibly and continue providing exceptional care to your community.

Is Expanding Into Skilled Care Services the Right Move?

It depends on your goals—and your readiness. Ask yourself:

• Do I have the clinical leadership to operate compliantly?
• Do I have the cash flow to wait for Medicare reimbursements?
• Am I ready to handle the compliance load?
• Is there unmet demand for skilled care in my market?
• Can I maintain quality and compliance across both service lines?
• Is my agency prepared to assist clients with both medical and daily living needs through skilled home care services?

For many agencies, the better next step isn’t adding skilled care—it’s strengthening the systems you already have.

Build the Right Foundation First

Before adding complexity to your operations, it’s worth asking: Have we truly optimized what we’re already doing? Regularly assess your agency’s readiness for expansion to ensure you are prepared for growth.

Agencies that run smoothly—where billing is consistent, caregiver management is streamlined, and documentation doesn’t feel like a second job, often do so by making the most of their agency management system—are in a much stronger position to explore new services down the line. This includes optimizing non-medical services such as meal preparation and assistance with daily activities, which are essential for client satisfaction and quality of care.

Whether your goal is to grow revenue, serve more clients, or explore new payor sources, the foundation matters. And that starts with getting your home care systems working for you, not against you. Providing ongoing education and training for your staff is also crucial to ensure high-quality care and readiness for future service expansion.

Need help tightening up your operations before growing? CareTime helps personal care agencies stay compliant, efficient, and ready for what’s next. If you’re looking to strengthen your agency before exploring new directions, we’re here to help.