From Red Tape to Relief: Barriers to Licensure for Home Health, Hospice and Home Care Agencies
Ginny Kenyon • February 4, 2026
In 2026, the home health care industry faces a critical intersection of rising demand and increasingly complex regulatory hurdles. As the population ages, the home care workforce must expand to meet the needs of millions, all while agencies and individual workers are finding it increasingly more difficult to secure and maintain the necessary licenses.
These barriers range from administrative backlogs to new federal mandates that threaten the viability of smaller providers.
1. New Federal and State Mandates
Recent regulatory shifts have introduced stricter requirements for agencies to remain eligible for reimbursement.
- Medicare Certification Alignment: Effective July 1, 2026, states like Indiana are implementing rules requiring all home health agencies to be Medicare-certified to receive Medicaid payments. This forces agencies that previously operated only under Medicaid to navigate the rigorous and expensive federal certification process.
- Suitability and Financial Reviews: New legislation in states like Massachusetts now requires suitability reviews for any individual with at least a 5% ownership stake in an agency, along with proof of significant financial capacity to provide care.
2. Administrative and Testing Backlogs
For individual workers, the path to becoming a home care aide or nurse is often stalled by "credentialing lag."
- Processing Delays: State departments are currently struggling with high volumes of pending applications, with some regions reporting thousands of supplemental materials awaiting review.
- Disjointed Testing: In many areas, workers cannot test where they train. This geographic and logistical gap between education and certification has led to high candidate drop-off and prevents qualified staff from entering the field quickly.
3. Financial and Operational Obstacles
The cost of entering the home health market has become a significant barrier for startup agencies.
- Prohibitive Costs: Beyond licensing fees, agencies must invest in costly infrastructure, such as electronic medical records (EMR) systems and specialized insurance (General and Professional Liability), before they can secure a license and even begin seeing patients.
- Reimbursement Cuts: The 2026 Medicare Home Health Final Rule includes significant payment adjustments and cuts. For many small agencies already operating on thin margins, these financial pressures make the cost of maintaining regulatory compliance unsustainable.
4. Limited Professional Mobility
Despite the Nursing Licensure Compact (NLC), which aims to allow nurses to practice across state lines, several barriers remain:
- Inconsistent Training Standards: Federal law requires 75 hours of training for home health aides, but individual states can set much higher bars—some as high as 180 hours—making it difficult for workers to move and re-license in new states.
- Immigration Hurdles: Immigrant healthcare workers often face licensure bans due to a lack of social security numbers or the lengthy, complex approval process for international certifications
As evidenced above, barriers to care are increasing from regulatory rules for agencies and the increased requirements for workers. While daunting, it is possible to be successful in the home health environment. If you need assistance with starting up an agency or maneuvering around new regulations,
Kenyon HomeCare Consulting is here to help. Call 206-721-5091 or email gkenyon@kenyonhcc.com
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