Introduction 

Starting a hospice agency requires meeting specific licensing requirements, usually through the state's Department of Health, and obtaining Medicare certification to provide reimbursable services. Hospice care focuses on providing comfort and support to terminally ill patients and their families. This guide outlines the essential steps to starting a hospice agency, including licensing, Medicare certification, staffing requirements, and compliance with state and federal regulations. 

Step-by-Step Guide to Starting a Hospice Agency 

1. Understand the Scope of Hospice Services 

Description: Hospice care focuses on providing palliative care to patients with terminal illnesses, typically when curative treatment is no longer an option. Services include pain management, emotional support, spiritual care, and assistance with daily activities. 

Action Point: Define the scope of services your hospice agency will provide, such as home care, inpatient hospice services, and respite care for caregivers. 

Tip: Consider offering a holistic care approach, including spiritual counseling, grief support, and bereavement services for families. 

2. Research State-Specific Licensing Requirements 

Description: Licensing for hospice agencies is regulated by each state, typically through the Department of Health or a similar regulatory body. State requirements often include submitting a detailed application, undergoing an inspection, and meeting staffing and facility standards. 

Action Point: Contact your state’s Department of Health to determine the specific licensing requirements. Research application processes, fee schedules, facility standards, and service delivery guidelines for hospice care. 

Tip: Many states provide licensing handbooks or checklists that outline all required steps. Review these documents carefully to ensure you meet the criteria for hospice licensure. 

3. Obtain Medicare Certification 

Description: To receive reimbursement for services provided to Medicare beneficiaries, hospice agencies must be certified by Centers for Medicare & Medicaid Services (CMS). Medicare certification is critical, as most hospice patients are Medicare beneficiaries. 

Action Point: Apply for Medicare certification through CMS. This process includes: 

• Completing CMS Form 855A for institutional providers. 

• Undergoing a survey by a State Survey Agency or Accrediting Organization (such as The Joint Commission or CHAP) to confirm compliance with Medicare’s Conditions of Participation for hospice care. 

• Passing an initial site inspection to ensure that your hospice services meet Medicare standards. 

Tip: Prepare for your Medicare certification survey by ensuring your facility, staff, and procedures align with CMS requirements. Review the Medicare Hospice Conditions of Participation to stay compliant with all rules and regulations. 

4. Develop a Comprehensive Business Plan 

Description: A business plan is essential for defining your operational strategy, financial goals, and staffing needs. A detailed plan will also help you secure funding and ensure long-term sustainability. 

Action Point: Create a business plan that includes: 

Services offered: Define the range of services, such as in-home care, inpatient care, and grief support. 

Target population: Identify the demographics you will serve, primarily Medicare beneficiaries, but possibly others depending on your funding sources. 

Financial projections: Develop a budget for startup costs (e.g., licensing fees, facility setup, medical equipment) and operational expenses (e.g., staffing, marketing, and insurance). 

Staffing needs: Outline the number and type of staff required, including registered nurses (RNs), physicians, social workers, home health aides, and chaplains. 

Tip: Include a marketing strategy that outlines how you will build referral relationships with hospitals, physicians, and community organizations to grow your patient base. 

5. Prepare Your Facility and Equipment 

Description: Your hospice agency must operate out of a licensed facility that complies with state and Medicare regulations. This may include office space for administrative functions, rooms for patient care, and space for counseling and support services. 

Action Point: Secure a facility that meets state licensing requirements, including patient privacy, infection control, fire safety, and accessibility standards. In addition, equip your facility with medical supplies and durable medical equipment (DME) necessary for providing end-of-life care, such as hospital beds, oxygen tanks, and mobility aids. 

Tip: If your hospice agency provides in-home care, ensure you have contracts with DME suppliers to quickly meet patient needs for equipment. 

6. Hire Qualified and Compassionate Staff 

Description: Hospice care requires a multidisciplinary team of healthcare professionals, including physicians, nurses, home health aides, social workers, chaplains, and volunteers. These staff members must be properly licensed and trained to provide high-quality palliative care. 

Action Point: Recruit and hire staff who meet state licensure and Medicare requirements. Positions you’ll need to fill include: 

Medical Director: A physician who oversees the clinical aspects of the hospice program. 

Registered Nurses (RNs): Provide direct patient care and symptom management. 

Home Health Aides: Assist patients with daily activities, such as bathing and dressing. 

Social Workers and Chaplains: Offer emotional and spiritual support to patients and families. 

Volunteers: Provide additional support and companionship to patients. 

Tip: Provide comprehensive training for all staff, focusing on the philosophy of hospice care, pain management techniques, and emotional support for patients and families. 

7. Submit Your Hospice Agency License Application 

Description: Once you have completed pre-licensure training and secured a compliant facility, the next step is to submit your application for a hospice agency license. 

Action Point: Gather all required documentation, which may include: 

• Completed application forms. 

• Staff qualifications and licenses. 

• Facility inspection reports. 

• Proof of compliance with state regulations. 

• Detailed descriptions of your hospice services and operational policies. 

Tip: Ensure your application is complete and accurate to avoid delays. Some states may require an initial fee, followed by an on-site inspection, before granting licensure. 

8. Undergo Initial Licensing and Medicare Certification Surveys 

Description: Before your hospice agency can begin operations, it must pass an initial inspection by state licensing officials and a Medicare certification survey. These surveys ensure that your facility, staff, and procedures meet all regulatory standards. 

Action Point: Prepare for the survey by reviewing the state-specific licensing requirements and CMS’s Conditions of Participation for hospice agencies. Inspectors will evaluate areas such as patient care procedures, infection control practices, and staff competency. 

Tip: Conduct an internal audit of your agency’s operations before the official survey to identify and address any potential compliance issues. 

9. Establish Policies for Compliance and Patient Care 

Description: Hospice agencies must follow strict guidelines for patient care, documentation, billing, and ethical standards. Establishing strong policies and procedures is crucial for maintaining compliance with state and federal regulations. 

Action Point: Develop policies and procedures for: 

Patient care: Ensure that care plans are patient-centered, focusing on symptom management, emotional support, and respect for patient autonomy. 

Billing and documentation: Follow Medicare billing guidelines to ensure accurate reimbursement for services provided. 

Privacy and confidentiality: Comply with HIPAA regulations to protect patient information. 

Ethical standards: Implement policies for ethical decision-making, informed consent, and handling conflicts of interest. 

Tip: Schedule regular staff training sessions on these policies to ensure compliance and high standards of care. 

10. Market Your Services and Build Referral Networks 

Description: Hospice agencies often rely on referrals from healthcare providers, hospitals, nursing homes, and community organizations. Building strong relationships with referral sources is essential to growing your patient base. 

Action Point: Develop a marketing plan that includes: 

Outreach to physicians and hospitals: Build referral partnerships by educating healthcare providers on the benefits of hospice care and how it can improve the quality of life for terminally ill patients. 

Community engagement: Hold informational sessions or workshops on end-of-life care, palliative care, and grief counseling to raise awareness in your community. 

Online presence: Create a professional website that highlights your services, care philosophy, and patient success stories. Use social media to promote your agency and share valuable resources on hospice care. 

Tip: Consider developing brochures or educational materials to distribute to doctors’ offices, hospitals, and senior living communities. 

Best Practices Based on Waiver Group Advisory 

Provide Holistic Care: Focus on the physical, emotional, and spiritual needs of patients. Incorporate services like grief counseling, music therapy, and spiritual support to address the whole person. 

Ensure Ongoing Staff Training: Regularly train your staff on the latest palliative care practices, pain management techniques, and emotional support strategies for patients and families. 

Maintain Strong Documentation Systems: Hospice agencies must keep detailed records to comply with Medicare billing and state licensing requirements. Use electronic health records (EHR) systems to track patient care plans, medications, and services provided. 

Promote Family Involvement: Encourage families to participate in care planning and decision-making. Offering support services for caregivers can strengthen relationships and improve patient satisfaction. 

Common Challenges and Solutions Based on Waiver Group’s Experience 

Challenge: Navigating Medicare Certification 

Solution: Partner with a consultant or healthcare attorney experienced in Medicare certification for hospice agencies. They can help you navigate the application process and prepare for the survey. 

Challenge: Securing Sustainable Funding 

Solution: Develop a diverse revenue model that includes Medicare reimbursement, Medicaid, private insurance, and donations from the community. Consider applying for grants to support specific services like grief counseling or volunteer programs. 

Challenge: Managing End-of-Life Care Discussions 

Solution: Train staff on communication techniques for discussing sensitive topics like end-of-life care, advanced directives, and the dying process with patients and families. Compassion and clear communication are essential for these conversations. 

State-Specific Considerations 

California: Hospice agencies in California are licensed by the California Department of Public Health (CDPH) and must comply with state-specific requirements for staffing, patient care, and facility standards. California also requires a separate application for Medicare certification. 

Texas: The Texas Health and Human Services Commission (HHSC) regulates hospice agencies, which must meet state and federal standards for patient care, infection control, and staff licensing. Texas also offers Medicaid reimbursement for hospice services. 

Florida: Florida hospice agencies are regulated by the Agency for Health Care Administration (AHCA), which enforces strict standards for facility inspections, staffing, and Medicare compliance. The state also has additional guidelines for hospice inpatient facilities. 

How Waiver Consulting Group Can Help 

Waiver Consulting Group offers expert guidance in starting hospice agencies, including: 

• Assistance with state-specific licensing and Medicare certification. 

• Development of operational plans, staff training programs, and compliance policies. 

• Support with navigating the regulatory process and preparing for facility inspections. 

• Help with building referral networks and marketing strategies to grow your patient base. 

For personalized support, schedule a consultation or visit our services page. 

Conclusion

Starting a hospice agency requires careful planning, compliance with state licensing requirements, and obtaining Medicare certification. By following the steps outlined in this guide, and with support from Waiver Consulting Group, you can build a successful hospice agency that provides compassionate, high-quality care to patients at the end of life. 

For more information or to get started, visit our getting started page or contact us for assistance.