Types of Home Care Agencies

There are several types of organizations that provide care in the home. An important distinction, however, is distinguishing between non-medical, in-home care services and medical or skilled care services. Skilled home health care organizations have existed for some time, but the rapid growth of non-medical agencies is meeting an increasing demand. Within these two main home care categories are varying delivery models each with significant differences regarding their scope of services, their funding sources and the level of liability their clients assume.

Non-Medical, In-Home Care Agencies

These agencies are also referred to as personal care, custodial care, homemaker, companion, and private duty agencies. A non-medical, in-home care agency provides services which are not considered skilled or medical care. These agencies provide non-skilled, supportive, custodial care that is supplied by certified nursing assistants (CNAs) and home health aides (HHAs) or by non-certified nurse aides, homemakers, personal care aides, personal attendants, caregivers, sitters and companions.

Non-medical caregiver agency services include personal care, companionship and supervision, as well as help in the home with tasks such as meal preparation, medication reminders, laundry, light housekeeping, errands, shopping, transportation, and companionship.

Activities of daily living (ADL) refers to six specific activities (bathing, dressing, transferring, using the toilet, eating, and walking) that reflect an individual's capacity for self-care. The number and severity of a person's ADL assistance needs often is used to determine eligibility for Long Term Care insurance benefits or may be used as part of an assessment tool by an in-home care company to determine the agency's charges for in home care services and also to appropriately staff assignments with qualified caregivers.

Instrumental activities of daily living (IADL) refers to six daily tasks (light housework, preparing meals, taking medications, shopping for groceries or clothes, using the telephone, and managing money) that enables the individual to live independently in their home. These agencies help patients by preparing meals and helping him or her bathe, dress, and keep house. They may also sit with patients who cannot be left alone for medical or safety reasons, which is sometimes called companion service.

Unskilled care is not covered under Medicare (except under certain conditions as part of an authorized episode of home health) and is usually paid for privately, or in some cases by private long-term care (LTC) insurance. A physician's order is not required (except for Medicare and LTC coverage) as the need for care is not deemed medically necessary and patient homebound status not required. A professionally authorized and monitored care plan is generally not required, although a non-medical plan of care is usually developed.

Some states require that these agencies be licensed and meet minimum standards of care, but licensure requirements and regulations vary from state to state unlike, federally regulated Medicare certified home health agencies. Non-medical home care agencies play an increasingly important role filling gaps in home care services not provided or covered under skilled care. Un-skilled home care services such as personal care assistance or cooking and cleaning help is often what may be needed most and by many in order to remain in their homes.

Within the non-medical, in-home care industry, there are several very different delivery models.

  1. Full Service, Non-Medical Agencies- These agencies provide a full spectrum of services and manage the entire in-home care experience for their clients including: carefully selecting, screening and employing their workers, doing background checks and managing payroll and taxes, to name a few. These agencies professionally supervise and monitor their staff with regards to the care their agency and caregivers provide. They arrange and schedule your caregivers for you and provide relief caregivers when necessary. These agencies are licensed (where required) and comply with employment, wage & hour, workers' compensation and other laws. They also will have proper and adequate levels of insurance (general & professional liability, worker's compensation and fidelity bonds). The full services agency oversees all your care needs and resolves any issues regarding your entire care experience.
  2. Registry or Staffing Agencies- These private-duty agencies provide nursing, homemaker, home care aide, and companion services. A private duty registry or employee staffing agency primarily acts as an employment service for a variety of skilled and unskilled healthcare workers including nurses, nurse assistants (CNAs) and rehab therapists. They match the provider with the client and generally collect a finder's fee. Many states do not require these types of agencies to be licensed or conform to specific regulatory requirements. The management of your care experience, including the caregivers in your home, is the key difference between these private duty registries and full service, in-home care. The registry matches an independent contractor caregiver with the patient needs, refers them to the client, and then collects a finder's fee. Consequently, the caregiver in the client's home does not work for the registry but instead the client acts as the employer. He or she becomes the supervisor, usually pays the worker directly, and is responsible for payroll taxes, including social security withholdings. In some cases, the registry or staffing agency will provide these administrative duties on your behalf through a trust account for a fee, but you, nevertheless, assume all liability as the employer of record. Registries and staffing agencies can be reimbursed for their services sometimes through long-term care insurance, but are mostly private pay. Requesting an employee referral through this type of service is similar to hiring an individual privately on your own, although they do take care of recruiting, and often the screening of caregivers.
  3. Private Hire of Independent, Freelance Caregivers- These are nurses, therapists, aides, homemakers, and companions who are privately employed by those who need their services. The patient or family must recruit, hire, and supervise the provider. The patient pays the caregiver directly and is responsible of all payroll taxes, proper withholdings and filings, worker's compensation and background checks, arranging replacement staff for time-off and emergencies. Generally, these independent caregivers are not licensed or certified. Managing your own employees may offer some potential cost savings, but at same time, the additional responsibility and liability without the advantage of an agency, may not offset the time-consuming employment demands and financial risks of managing your caregivers privately.

Medical or Skilled Home Health Care Agencies

Skilled Home Health Care Agencies

The most familiar provider of medical home care services is the skilled home health agency. The home health agency is licensed and usually Medicare certified and may also accept other third party health insurances. Medicare certification means that the agency has met specific federal guidelines and criteria. The main purpose of this type of agency is to provide skilled care for treatment or rehabilitation services to homebound patients. Home health care professionals must strictly adhere to a physician approved plan of care that is deemed medically necessary in order for Medicare benefits to continue.

Services provided generally include medical or psychological services, wound care, pain and medication management, disease management, nursing care services, oxygen services, medical supplies and equipment, physical therapy, speech therapy, occupational therapy and home health aide care. The same agency may deliver different kinds of home care services through nurses, therapists, social workers, homemakers and home care aides, medical equipment and supply dealers, and volunteers. Some agencies limit their services to nursing and one or two other specialties. If care is needed from more than one specialist, the home health agency will set up a team to provide care that covers your needs. Because home health agencies hire and supervise their personnel, they assume liability for their services. Home care services generally are available 24 hours a day, 7 days a week.

All must be state licensed and most are Medicare and Medicaid (Med-Cal in California) certified. Many are also accredited by independent third-party review organizations such as JCAHCO, CHAPS or HHC. Services are generally paid for by Medicare, Medicaid, and private health insurance and patients must meet strict criteria for participation and payment authorization. However, some medical agencies also offer their medical home care services to the public on a private duty or private pay basis. There are approximately 9,800 licensed Home Health Agencies operating nationwide.

While the main focus of these agencies is medical care, some also have a dedicated non-medical, in-home care service they offer to the public in the same way as the non-medical, in-home care or private duty agencies mentioned above. Individuals often may still have ongoing personal care needs even though skilled home health care services are no longer required. As a result of this common need, some home health agencies offer a private pay, non-certified component within their agency and offer nursing assistants to continue providing personal and custodial care to their patients on a private pay basis.

Hospice Care Agencies

These are a specialized type of skilled home health for individuals needing pain management and compassionate end-of-life services. All persons regardless of age who have a life-threatening or terminal illness may receive hospice care. Most reimbursement sources require a prognosis of six months or less if the illness runs its normal course. Patients with both cancer and non-cancer illnesses are eligible to receive hospice care. This type of care involves a core team of skilled experts and volunteers who provide all-around medical, psychological, and spiritual care when cure is no longer possible. Specifically, these services include pain management, palliative care, social/psychological support and chaplain services for the patient and their family. It is usually based at home so families can take part in the patient's care. Trained hospice professionals are available 24 hours a day. They help the family care for the patient, ensure that the patient's wishes are honored, and keep the patient comfortable and free of pain. Most states require Hospice Agencies be licensed and Medicare certified. Hospice services are generally paid for by Medicare, and patients must meet strict criteria for participation and payment authorization.

Pharmaceutical and Infusion Therapy Companies

These companies deliver medicines, equipment, and nursing services for people who need intravenous (IV) fluids, nutrition, or treatments. They also give special feedings through tubes that are placed in the stomach or intestine (tube feedings.) Nurses teach patients and family members to give these medicines, fluids, or feedings in the patient's home. Some pharmaceutical and infusion therapy companies are certified by Medicare.

Home Medical Equipment (HME) and Medical Supply Dealers

These companies provide products ranging from respirators (breathing machines), wheelchairs, and walkers, to catheter and wound-care supplies. They deliver these products, install or set them up, and teach patients and caregivers how to use them. Most of these companies do not provide physical care for patients, but a few offer pharmacy and infusion services. They may provide a nurse to give medicine and tube feedings to patients and teach the patient and family the proper way to give these on their own. Some provide respiratory therapy services to help patients use breathing equipment. Those that bill Medicare are required to meet federal minimum standards. Some states require that these companies be licensed.


While there are significant differences between non-medical, in-home care versus skilled home health care agencies, in reality, most elderly individuals needing one type of care will eventually need both types, at some point in their life. The proliferation of many quality, affordable, non-medical, private-duty agencies across the country is meeting the increasing demand for in-home care assistance and services.

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