Not a week goes by without someone inquiring about how to open a long-term care related business. Whether it’s because of the state of the economy, fears of downsizing or burgeoning entrepreneurial spirit, the demographics in Florida are certainly in our favor. In case you’ve flirted with a similar idea, here are some points to consider:
- Decide on the type of services you want to offer. Skilled services are those that require a licensed professional, such as a nurse or therapist. Non-skilled services encompass personal care, such as assistance with bathing, grooming, eating, etc. Homemaker/companion services are also non-skilled, but include no “hands-on” care of patients.
- Evaluate the various payors you would like to pursue. Skilled services are medically necessary, so Medicare and third-party health insurance are the primary sources of revenue. For non-skilled services, Medicaid, long-term care insurance and self-funding (private pay) are the most common options. Health plans can make annual changes to their benefit offerings so we urge clients to periodically check with payors in case their policies related to your ideal business type change.
- Based on the services you expect to provide and payors you will pursue, decide on the structure of your business.
- All home health agencies (HHA) (skilled and non-skilled) are licensed by AHCA. Those that will offer skilled care require accreditation from one of three organizations. A one-year timeline from getting started, in earnest, to final accreditation isn’t unrealistic.
- Nurse registries (NR) are also licensed by AHCA but do not require accreditation. These can generally be launched in four to six months.
- Homemaker/Companion Services (HCS) are registered with AHCA, do not require accreditation and can open in about 30 days.
- Assess your background and candidates for leadership positions. HHAs require a qualified administrator and alternate and director of nursing for skilled agencies or RN supervisor for non-skilled. NRs need an administrator and alternate, as well as a nurse. For an HCS, there are no special personnel requirements.
- Capital requirements are hard to predict. AHCA reviews financial projections for the first two years of the HHA and for the one year for a NR. The various financial schedules, based on the business’s projected overhead and patient volume, yield the amount of capital required. In addition, Medicare has separate financial requirements based on the costs reported by agencies in the proposed business’s geographic area. For an HCS, AHCA does not have capital requirements.
Obviously, many other issues factor into the decision to start a business, but consider that the US Census Bureau projects that over 49 million Americans are over the age of 65, and that this figure will grow to over 65 million in 2025. The Census Bureau also estimates that, in 2021, almost 21% of the Florida population was over age 65. Each day, more than 10,000 Baby Boomers turn 65 years of age and become prospects for your long-term care related business.