Does Home Care Licensing Benefit Our Industry?

In July, Ohio will be the 30th state to require a home care license. The $250 fee and license application will require fingerprinting for the primary owner, a copy of the criminal records check policy, and a copy of policies and procedures related to the services offered. In comparison, California has a $5,600 application fee, written policies and procedures, an Administrator and an Alternate Administrator to run the agency, and attend a mandatory orientation and renewal every two years. For Ohio, going from a non-license state to a licensed state will undoubtedly draw criticism, and many will wonder if it’s just a money grab from the state or will it increase the quality of home care. This has long been the question when the topic of licensing is discussed. So, is licensing worth the money and hassle? The best way to decide is to look at the disadvantages and advantages of licensing.

What are the disadvantages of licensing?

According to the U.S. Census Bureau, in 2019, there were approximately 54.1 million people over 65 years old. Nearly 70% of those adults will likely need long-term care support at some point. The home care industry has grown 3.4% yearly for the last five years and is expected to grow 4.7% in 2022[1]. As a result, states have evaluated licensing requirements to address concerns around the quality of care. Knowing the potential home care tsunami with the aging population, several states added licensure requirements quickly without evaluating the potential impact to agencies and their ability to meet those requirements. Many states didn’t have the personnel to manage the requirements connected to the license, creating a backlog of up to a year and a half to receive a license. Lack of personnel has delayed surveys which can affect the quality of care. In some cases, the backlog created a moratorium preventing new agencies from opening. This may seem like a good thing for existing agencies, but in reality, it can impede the ability to meet the demand for home care. With the growing population, there is more business than one agency can handle. Without help from additional agencies, families will need to take on the care, or seniors could go without any care.

Licensure can have so many regulations that it requires additional staff in order to be in compliance. For example, in Virginia, an agency must present the home care policies of the agency and have a Registered Nurse Supervisor to oversee caregivers. Virginia also requires an Administrator and an Alternate Administrator to run the agency. The license is renewed every year and the agency must go through a state survey. Requirements such as this will increase operating costs and reduce the agency’s margins.

A lack of proper oversight by the state may produce rogue agencies operating outside the regulations. This affects agencies that operate in full compliance with the regulations. It builds resentment and obstacles to agencies working together to serve their communities. Poor oversight opens up the opportunity for illegal or unethical operations, which, in turn, impacts the quality of care the client receives.

What are the advantages of licensing?

With the addition of expanded Medicare and Medicaid services into non-medical home care and the shift to home in light of COVID-19, licensing has become even more important. Not only does licensing provide uniform standards, consistency, and quality of care, but it is also a tool to keep the playing field even. So let’s take a deeper dive:

  • The license provides uniform standards and consistency. In states that are not licensed or do not have proper oversight, agencies may provide services outside the scope of home care. This causes confusion between home care and home health as well as puts the client at risk. Last year, I attended a cookout at a friend’s home. I met a woman who told me she was a caregiver for a small agency in Ohio. I asked her a lot of questions and discovered when she is not able to cover a shift, the agency allows her untrained 17-year-old daughter to cover for her while she is out. I know several other agencies in the area that don’t have this practice; therefore, standard practices are inconsistent. This type of inconsistency puts the client and, ultimately, the agency at risk.
  • License governs the quality of care. Most licensure states require caregiver training to ensure quality of care. Training will give caregivers the knowledge to perform their duties with exceptional care, and they will know what the agency expects. For example, the state of Illinois requires in-home service workers to complete 8 hours of initial training and a minimum of 8 hours of continuing education annually. Homecare Aides must complete 2 hours of agency-specific orientation, 22 hours of topic-specific training, and 12 hours of continuing education annually. Although Illinois is unique, it demonstrates the importance of training caregivers so they are equipped to provide quality care.
  • Licensure evens the playing field. When done correctly, a license will keep agencies providing the same level of care, the exact requirements on care plans, supervisor visits, background checks, staffing, and training. This will eliminate agencies that hire unqualified caregivers at a low pay rate with little to no oversight. It assures everyone is playing by the same rules. For example, several years ago, a home care agency discovered their main competitor did not do background checks on all their employees. They were told they only did them on the people they suspected needed a background check. The training was also sporadic. Although they were in a non-licensed state, the first agency was consistent with background checks for everyone and training. This put the agencies on different levels since the second agency’s costs were lower. A license would put them on the same level.

What If Your State Does Not Require a License?

If your state currently does not have a license, it’s coming. As the industry grows, so will the call for a license. Home care licensing is similar to a driver’s license; we don’t necessarily like the rules, but we understand they are necessary to keep us and the roads safe. Licensing should eliminate sub-par agencies and elevate the quality of care. It is important for states to listen to seasoned home care operators and develop standards around those conversations. When they do, everyone wins. Agencies need to be involved at their state-level around potential licensing. Narendra Modi once said, “A strong government is where the will of the people matters, where the voice of the people is heard, and where the dreams of the people are fulfilled.” Speak to your state representatives about the need to set standards and hold agencies accountable for quality care. Be a part of the conversation. Discuss the advantages and disadvantages. If done correctly, it can set up your agency for growth, the playing field will be even, and those sub-par agencies will be gone.

Does licensing benefit the home care industry? There are clear arguments for both sides. Certainly, licensing intends to regulate and standardize care to promote quality care and protect the recipients of that care. As home care providers, it is crucial that our voices be heard in advocating with State 

[1], Home Care Providers in the US – Market Size 2002-2027

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About Cheryl Hammons CFE, CSA

Cheryl Hammons is an experienced home care professional, published author, and frequent speaker. She has held several roles throughout her 12 years in the home care industry, including training, support, and operations. She currently serves as Strategic Partnership Director at Veterans Care Coordination where she focuses on building value-driven relationships, developing revenue-generating programs, and creating educational materials for home care partner companies. Cheryl is the author of "Embracing a New Normal: Dealing with Grief" and "Respecting Religious Differences in Home Care."