Home Health Regulatory

Overview

A home health, hospice, or home-care agency runs on two things most operators treat as one: authority to operate and authority to bill. Medicare certification — earned by meeting the federal Conditions of Participation and passing a survey — is what lets the agency bill Medicare. The authority to operate is a matter of state law, and for a home-health agency it looks different from state to state: in Tennessee and Georgia it is a state license; in Alabama there is no standalone home-health operating license, so entry is governed by Certificate of Need and federal certification instead. (Hospice and personal-care agencies carry their own, different state entry rules in each state — this page uses the home-health lane as its through-line.) Either way, operate-authority and bill-authority come from different regulators under different bodies of law, and they can fail independently. Passing a Medicare survey does not cure a state entry defect, and clearing the state side does not entitle an agency to a Medicare payment.

That split runs through the entire regulatory lifecycle: getting approved to exist (often a Certificate of Need contest), getting certified, surviving surveys, and getting paid without a contractor pulling the money back. This page is written for the people who carry that risk — owners, administrators, and their consultants running skilled home-health, hospice, and home-care agencies, including startups and buyers stepping into someone else’s compliance history.

The posture here is resolution-first. A survey deficiency, an enforcement remedy, or an overpayment demand is a position the government has to defend, not a closed door. Most of these matters resolve without a hearing — a defensible plan of correction accepted, an extrapolated overpayment negotiated down — and they resolve on better terms when the agency’s response is organized early and prepared to go the full distance. Readiness for the hearing is what makes the quiet resolution available.

Michael served as an Agency Attorney at the Alabama Certificate of Need Board from 1995 to 1997, working on certificate-of-need, administrative, and regulatory matters — agency rulemaking and contested cases — from inside a state health-regulatory agency. He knows how a health agency assembles a file and what an applicant actually has to prove, because he sat on the regulator’s side of it. He practices across Tennessee, Georgia, and Alabama.

Licensure and Medicare certification

The federal side is uniform. To bill Medicare, an agency has to meet the Conditions of Participation and pass a survey. CMS owns the standards and contracts the on-site survey out to a state survey agency, or accepts a survey from a CMS-approved accrediting organization. That credential — certification — is the same test in all three states.

The state side is where operators get surprised, because the entry regime is genuinely different in each of Tennessee, Georgia, and Alabama. Tennessee licenses home-health agencies through a state health-facilities regulator, separate from Medicare certification. Georgia licenses through its state health agency and runs a separate category for non-skilled companion and personal-care providers — a different lane a business reader may actually be in, with its own standards. Alabama is the outlier: it has no standalone home-health-agency operating license. Entry there is governed by Certificate of Need plus Medicare certification, so an Alabama operator clears the CON and the federal survey rather than pulling a separate state license. The precise authority, rule chapter, and entry framing in each state is the kind of detail worth confirming against the current regulation before relying on it, because these regimes have moved recently.

The operational payoff of keeping operate-authority and bill-authority straight shows up hardest at a change of ownership. A single transaction can start several separate clocks at once — the state entry step (a licensure filing in Tennessee or Georgia, a CON change-of-ownership filing in Alabama or any CON state), assignment or re-enrollment of the Medicare provider agreement, and the CON change-of-ownership piece wherever CON applies. Miss that any one of them is running and the deal can close on paper while the agency’s authority to operate or bill quietly lapses. Michael handles change-of-ownership work — the state licensure filings, the Medicare provider-agreement assignment or re-enrollment, and the CON change-of-ownership piece — so those clocks get tracked as part of the deal rather than discovered after closing.

Conditions of participation

The Conditions of Participation are the standard a survey measures an agency against. They are the clinical and organizational requirements a Medicare-certified home-health agency has to meet: patient rights, comprehensive patient assessment, care planning and coordination, quality assessment and performance improvement, infection prevention and control, skilled professional services, and home health aide services — layered over the organizational conditions covering compliance with law, emergency preparedness, administration, clinical records, and personnel qualifications. Hospice operates under its own parallel set of conditions.

For a business reader the useful point is not the catalog but the function: the Conditions of Participation are the yardstick. Every survey finding is keyed to a specific condition or standard, and whether a finding is survivable or agency-threatening turns on which one it lands under and how far the noncompliance reaches. When people talk about “failing” a survey, they mean a finding serious enough to knock a whole condition out of compliance — which is a different thing from the routine deficiencies most agencies collect and correct.

Surveys and plans of correction

A survey — routine, complaint-driven, or a validation check — produces a Statement of Deficiencies on Form CMS-2567, with each finding tied to the specific condition or standard it violates. The agency responds with a plan of correction, and the plan is where matters are usually won or lost.

An acceptable plan of correction does more than promise to do better. For each deficiency it fixes the specific patients and records cited, identifies who else could have been affected, changes the underlying process so the problem does not recur, sets monitoring to confirm the fix held, names the person responsible, and gives a completion date proportionate to how serious the finding is. “Staff were re-educated,” standing alone, is the plan that gets rejected — it corrects the symptom and leaves the system untouched.

Findings are scored on two axes: scope (isolated, a pattern, or widespread) and severity (potential for harm up through actual harm and, at the top, immediate jeopardy). The distinction that governs the stakes is standard-level versus condition-level. A standard-level deficiency is the ordinary case — cite, correct, move on. A condition-level deficiency means an entire Condition of Participation is out of compliance, and that is what opens the door to the enforcement remedies below, up to termination.

Immediate jeopardy is the severe tier — a situation likely to cause serious injury, harm, or death — and it carries the fastest clock, with a much shorter window to remove the jeopardy before termination than ordinary condition-level noncompliance. Those timelines are frequently misstated, and the exact day counts are worth pulling against the current regulation for any specific matter.

The important thing to hold onto is that agencies routinely recover from a failed survey. A condition-level citation is a serious moment for any agency. It is also, in the ordinary course, a correctable one — the recovery runs through a plan of correction that actually addresses the system and a revisit survey that confirms it, and the agencies that come through cleanly are the ones that respond fast and correctly rather than defensively.

Enforcement remedies

When a deficiency is serious enough, CMS has a menu of remedies short of shutting an agency down, and termination sits at the far end of it, not the front. Understanding the menu is what keeps a matter from being treated as more terminal than it is.

The lesser remedies include a directed plan of correction or directed in-service training, where CMS dictates the fix or mandates specific training; temporary management, where CMS installs an outside manager to run the agency through correction; and suspension of payment for new admissions, where the agency keeps operating and keeps getting paid for current patients but Medicare stops paying for new ones until it is compliant. That last one is cash-flow pressure short of a shutdown. Like the other enforcement sanctions, it comes with formal appeal rights — the CMS sanction notice states the right to appeal, and the appeal runs the enforcement track (an ALJ before the Departmental Appeals Board). A separate and easily confused action is a payment suspension based on suspected overpayment or fraud, which is not an enforcement sanction and is answered by a written rebuttal on a short window rather than a formal appeal. The two look alike and are handled very differently, so the first job is identifying which one the notice actually is.

Civil money penalties are the remedy operators ask about most. They run either per-day or per-instance for a given deficiency — never both for the same one — with the per-day amount capped and adjusted annually, escalating for immediate jeopardy or for condition-level noncompliance that repeats or goes uncorrected. There is a structured discount for conceding: an agency that waives its hearing right in writing, within the deadline, takes a fixed percentage reduction of the penalty. Whether that trade makes sense depends on the strength of the underlying findings, which is exactly the call to make with counsel rather than reflexively.

Termination of the Medicare provider agreement is the terminal remedy — it ends the agency’s ability to bill Medicare. The right way to read termination is as the endpoint of a problem no one addressed, not a default outcome. The entire purpose of a fast, organized response is to keep a matter from traveling that far.

One structural point matters more than any single remedy: enforcement and certification determinations are appealed on a different track from claims and overpayments. Enforcement disputes run — where informal dispute resolution is available, through it first — to an administrative law judge in the HHS Departmental Appeals Board’s Civil Remedies Division, then to the Board’s appellate division, and from there to federal court: a court of appeals for a civil money penalty, a district court for a termination. That is a different body, and a different court, from the appeals ladder that governs a denied claim or a recoupment. Filing an enforcement dispute into the claims ladder, or the reverse, is a live way to lose in the wrong forum. The specific deadlines and the judicial-review forum are worth confirming against the governing regulation for the matter in front of you.

Reimbursement and overpayment disputes

The other half of the practice is getting paid — and keeping the money once it arrives. A home-health agency’s payment risk comes from a lineup of contractors, and the first useful thing an operator can do is figure out which one is knocking.

The Medicare Administrative Contractor pays claims, issues the initial overpayment demand, and decides the first level of appeal. Recovery Audit Contractors are post-payment auditors paid on contingency. Unified Program Integrity Contractors are the fraud-and-abuse investigators — the heavy hitters for home health — and they are the ones empowered to use statistical sampling and extrapolation. Targeted Probe and Educate is a lighter-touch, education-first review. Knowing which contractor sent the letter tells an agency how serious the review is and how to respond, and the letter itself is not always clear about it.

Extrapolation is where the numbers get frightening and where the real fight usually is. Instead of denying the specific claims it reviewed, a contractor projects the error rate from a sample across the agency’s entire claim universe — often across a multi-year span — turning a handful of denied claims into a six- or seven-figure alleged overpayment. The credible challenge is rarely “a better statistical method existed.” It is that this sample was not representative, or this methodology was unsound, frequently developed with a retained statistician. Win the sampling argument and the projected overpayment can collapse back toward the actual denied claims.

The cash-flow fact that surprises agencies most is recoupment timing — and here two different clocks matter, which is where agencies get caught. To stop recoupment from starting, the appeal has to be filed inside a short window tied to the demand (materially shorter than the outer deadline for filing the appeal itself), and only the first two levels — redetermination, then reconsideration — hold recoupment off. Filing merely by the ordinary appeal deadline is not enough to prevent recoupment; it has to be the earlier recoupment-stop window. And even a timely-stayed recoupment resumes after the reconsideration decision: money can be pulled back before an administrative law judge ever hears the case, even for an agency that keeps appealing. That reorders how an agency should think about timing, cash reserves, and which levels to contest hard. One more caveat belongs in the cash planning: stopping recoupment does not stop the meter — interest keeps accruing on the outstanding overpayment while recoupment is paused, and it is owed if the appeal ultimately loses.

The claims-and-overpayment ladder itself has five levels, each with its own deadline: a redetermination by the Medicare Administrative Contractor, a reconsideration by a Qualified Independent Contractor, a hearing before an administrative law judge at the Office of Medicare Hearings and Appeals, review by the Medicare Appeals Council, and finally judicial review in federal district court. The amount in controversy has to clear a threshold to reach the administrative law judge and a higher one to reach court. The exact filing deadlines and dollar thresholds re-adjust and should be confirmed against the current notice before a matter is calendared, and the administrative-law-judge level in particular has carried a real backlog that affects how long the full ladder takes. Note the two “DABs” are not the same thing — the enforcement track’s Departmental Appeals Board (Civil Remedies Division, then a court) is a different body from the claims track’s Medicare Appeals Council, which is also housed at the Board but leads to district court. Filing into the wrong “DAB” is a real and avoidable error.

Medicaid is a separate system with its own deadlines and its own forum, and a live Medicare appeal does nothing to preserve a state one. Tennessee handles TennCare overpayment recovery through the state’s administrative-appeal machinery; Georgia routes program-integrity disputes through its health agency and the state administrative-hearings office; Alabama’s Medicaid agency runs its own administrative hearing under the state’s procedure act. Missing a state deadline forfeits the state appeal even if the federal one is still alive. The precise provider-appeal rule and forum in each state are worth confirming for the specific recovery in question.

Certificate of need for home health

Before any of the above, an agency has to be allowed to exist — and in all three of these states, opening a home-health agency is generally a Certificate of Need event. As of mid-2026, home health remains CON-regulated in Tennessee, Georgia, and Alabama, even as those states have deregulated other services around it. Certificate of Need is also commonly triggered not just by opening but by relocating, expanding a service area, or changing ownership.

Tennessee is the fastest-moving of the three: recent reforms deregulated a range of services but specifically retained Certificate of Need for home health and hospice, with a standing exemption for pediatric-only agencies, even as other services phase out of the program. Georgia’s most recent reform loosened Certificate of Need for several categories but left home health inside the program. Alabama continues to run home-health Certificate of Need in full, using a county-based need methodology. All three CON statuses are the single most time-sensitive thing on this page and should be re-checked against current law before an agency relies on them.

The federal side currently has its own entry pause, and it is worth knowing about before planning a startup or an acquisition: effective May 13, 2026, CMS imposed a temporary nationwide moratorium on enrolling new Medicare home-health agencies and hospices — an initial six-month window, extendable — so even where state law would permit a new agency, Medicare enrollment for a new one is paused while the moratorium lasts. Existing enrolled providers can keep operating and billing, but the moratorium reaches more than startups: adding a new practice location to an existing enrollment — a branch, satellite office, or expansion site — is prohibited while it lasts; a relocation can be treated as the establishment of a new provider entity if it amounts to a substantive operational change; and a change in majority ownership that requires a fresh enrollment can be caught by it. That makes the moratorium a due-diligence item on any 2026 expansion or transaction.

This is where inside knowledge of how a health-regulatory agency actually evaluates a file earns its keep. Michael won a Certificate of Need for a Medicare-certified home-health-agency startup in the greater Birmingham area, over competing applicants and objecting incumbents, and the agency was successfully opened. Prior results do not guarantee a similar outcome. The procedure of a CON contested case — the need methodology, the opposition filings, the appellate review — is handled in depth on the Certificate of Need practice page; this page’s job is to place CON where it actually sits in a home-health agency’s regulatory lifecycle, as the entry hurdle before licensure and certification.

Across Tennessee, Georgia and Alabama

This practice is genuinely tri-state. Michael is admitted in Tennessee, Georgia, and Alabama, and before the U.S. Courts of Appeals for the Sixth and Eleventh Circuits — the courts that hear appeals from those states (the Sixth for Tennessee, the Eleventh for Georgia and Alabama) — as well as the Ninth Circuit.

Keep in mind which layer of the regime is state and which is federal. Medicare certification and the Conditions of Participation are federal and uniform across all three states. The state entry credential (for a home-health agency: a license in Tennessee and Georgia; CON-plus-certification, with no standalone license, in Alabama), the state survey agency that runs the on-site inspection, Certificate of Need, and Medicaid provider appeals are all state-specific, and they differ meaningfully among Tennessee, Georgia, and Alabama. An agency operating in more than one state is carrying three different state entry regimes and three CON postures at once over a single federal certification standard. The firm serves agencies throughout all three states.

Counsel or consultant

If a piece of paper with legal consequences has landed — a documentation request, an audit notice, an overpayment demand, a Statement of Deficiencies on a termination track — the value of moving early is real, because several of the clocks in this area start running before an agency finishes reading the letter. That is a different moment from ongoing survey-readiness, where a good consultant handling mock surveys, policies, and QAPI is often the right and more economical call. The two roles work together: the consultant keeps the agency ready; the lawyer steps in once an adverse action carries legal stakes and needs a defense, an appeal, or privileged advice.

Related

The supporting explainers for this practice — on the licensure-versus-certification split, writing a plan of correction that holds, and fighting an extrapolated overpayment — are in development and will be linked here.

For the machinery underneath these matters, see the two sibling practices this page draws on: Certificate of Need, which owns the CON contested-case fight, and Administrative Law — a survey dispute, a license action, and a reimbursement appeal are all administrative proceedings, and the administrative-law page covers that procedural spine across agencies.

This page is general information about home-health regulatory law in Tennessee, Georgia, and Alabama, not legal advice, and reading it doesn’t create an attorney-client relationship.

Common questions

What's the difference between a home health license and Medicare certification?

Authority to operate a home health agency comes from state law; Medicare certification is separate federal permission to bill Medicare, earned by meeting the Conditions of Participation and passing a survey. They come from different agencies under different rules and can fail independently — holding one does not give you the other. The state side works differently across Tennessee, Georgia, and Alabama: Tennessee and Georgia issue a state home-health license, while Alabama has no standalone home-health license and instead controls entry through Certificate of Need plus Medicare certification. So the "operate" side has to be handled state by state.

What happens if a survey finds a deficiency?

You receive a Statement of Deficiencies and submit an acceptable plan of correction within a short window. A standard-level deficiency is usually resolved by correcting the specific problem and the process behind it. A condition-level deficiency is more serious — it means an entire Condition of Participation is out of compliance and can trigger enforcement remedies. Most agencies recover from a deficiency when they respond quickly and correctly, and a revisit survey confirms the fix.

Can CMS shut down my home health agency?

CMS can terminate a Medicare provider agreement, but termination is the end of an unaddressed problem, not the usual first step. Condition-level noncompliance puts an agency on a termination track with a defined window to correct, and immediate-jeopardy findings carry a much shorter clock. Before termination, CMS has lesser remedies — civil money penalties, suspension of payment for new admissions, temporary management, and directed correction. A fast, competent response is what keeps a matter off the termination track.

How do I appeal a Medicare overpayment?

Medicare overpayment appeals run through five levels, each with its own deadline: a redetermination by the Medicare Administrative Contractor, a reconsideration by a Qualified Independent Contractor, a hearing before an administrative law judge at the Office of Medicare Hearings and Appeals, review by the Medicare Appeals Council, and federal court. Watch the recoupment clock separately from the appeal clock: to stop recoupment from starting, the first two levels — redetermination, then reconsideration — must be filed inside a short window tied to the demand that is shorter than the ordinary deadline for filing the appeal itself, so meeting the appeal deadline alone does not hold the money. And even a timely-stayed recoupment resumes after the reconsideration decision — and interest keeps accruing on the balance while recoupment is paused — so timing and cash planning matter.

Do I need a certificate of need to open a home health agency in Tennessee, Georgia, or Alabama?

As of mid-2026, yes in all three — home health remains CON-regulated in Tennessee, Georgia, and Alabama even though those states have deregulated other services. Tennessee exempts pediatric-only agencies, and Alabama uses a county-based need methodology. CON is also generally triggered by relocating, expanding a service area, or changing ownership. This area moves quickly, so confirm current status before relying on it.

What is immediate jeopardy, and how fast can it lead to termination?

Immediate jeopardy is the most serious survey finding — a situation likely to cause serious injury, harm, or death to a patient. It carries the fastest enforcement clock: the agency has to remove the jeopardy quickly, and an uncorrected immediate-jeopardy situation can lead to termination on a much shorter timeline than ordinary condition-level noncompliance. Because the timeline is short, the response has to be organized immediately.

What's the difference between a UPIC audit and a routine Medicare review?

A UPIC — Unified Program Integrity Contractor — audit is a fraud-and-abuse investigation, and UPICs can use statistical sampling and extrapolation, projecting an error rate from a sample across years of claims to build a large alleged overpayment. That makes a UPIC audit higher-stakes than a routine documentation review, and the statistical methodology itself is often the most important thing to challenge.

Wherever your matter stands, the next step is a conversation. Call (615) 378-8942 or email mfb@braun-law.com.