Last updated: November 2026
A home health agency (HHA) enters Medicare by meeting the Conditions of Participation in 42 CFR Part 484, holding the initial reserve operating funds that 42 CFR 489.28 requires, and enrolling with CMS. A nationwide CMS moratorium has applied to new HHA enrollment since May 13, 2026, so a start-up cannot currently finish that last step. Integral Healthcare Solutions (IHS), a consulting firm, drafts the funds proof file, the Part 484 policy set and the mock-survey tracers now, so the owner is ready when the moratorium ends. You sign and file everything.
Checked November 5, 2026 against the official eCFR text and CMS pages.
What is Medicare entry for a home health agency?
It is the sequence an agency completes to bill Medicare: meet the Part 484 conditions, prove the 489.28 capital, enroll, and pass an initial survey by a State survey agency or an approved accrediting organization. 42 CFR 424.518 treats prospective (newly enrolling) home health agencies as "high" categorical risk, with fingerprints required from every individual holding a 5 percent or greater direct or indirect ownership interest.
What does 42 CFR 489.28 require?
Under paragraph (a), an HHA entering Medicare on or after January 1, 1998, including a new HHA created by a change of ownership that results in a new provider number, must have "initial reserve operating funds" available at application and throughout enrollment up to the end of the 3-month period after billing privileges are conveyed, exclusive of actual or projected accounts receivable from Medicare (42 CFR 489.28).
Paragraph (b) sets the amount: the funds are sufficient "if the total amount of such funds is equal to or greater than the product of the actual average cost per visit of three or more similarly situated HHAs in their first year of operation (selected by CMS for comparative purposes) multiplied by the number of visits projected by the HHA for its first three months of operation—or 22.5 percent (one fourth of 90 percent) of the average number of visits reported by the comparison HHAs—whichever is greater."
Paragraph (d) requires account statements plus a bank officer's attestation, if the institution offers one, and says the officer who will certify the cost report "must certify what portion of the required initial reserve operating funds is non-borrowed funds, including funds invested in the business by the owner. That amount must be at least 50 percent of the required initial reserve operating funds. The remainder of the reserve operating funds may be secured through borrowing or line of credit from an unrelated lender."
Is there a moratorium on new home health agency enrollment right now?
Yes, according to the pages we read on November 5, 2026. A temporary nationwide moratorium on HHAs and hospices took effect May 13, 2026. The Federal Register, CMS-6101-N notice states: "Beginning on the effective date of this notice, no new HHAs or HHA branches or practice locations will be enrolled into Medicare unless the HHA's enrollment application was received by the applicable Medicare contractor prior to this notice's effective date." The CMS, QSO-26-11 memo adds that applications submitted during the moratorium "will be denied."
The notice says a moratorium "remains in effect for 6 months" and "may be extended in 6-month increments." IHS's reading is that the first period ends about November 13, 2026. The Federal Register issues of November 3 and 4, 2026 do not mention a moratorium.
Who needs it and what triggers it
- A start-up owner preparing a first enrollment. Applications received during the moratorium are denied, so the work now is preparation. An application received before May 13, 2026 continues to be processed, according to QSO-26-11.
- An acquirer. 42 CFR 424.550(b)(1) provides: "Unless an exception in paragraph (b)(2) of this section applies, if there is a change in majority ownership of a home health agency (HHA) or hospice by sale ... within 36 months after the effective date of the HHA's or hospice's initial enrollment in Medicare or within 36 months after the HHA's or hospice's most recent change in majority ownership, the provider agreement and Medicare billing privileges do not convey to the new owner." The omitted words list the kinds of sale. The buyer must then enroll as a new HHA and obtain a State survey or approved accreditation. The (b)(2) exceptions include two consecutive years of full cost reports since initial enrollment or the last change in majority ownership, whichever is later, and low or no utilization cost reports do not count as full. The CMS, Provider Enrollment Moratoria page (last modified August 27, 2026) says the moratorium includes non-exempt changes in majority ownership under 424.550(b).
- A deactivated agency. Under 42 CFR 424.540(b)(3)(i), an HHA deactivated under paragraph (a) "must obtain an initial State survey or accreditation by an approved accreditation organization before its Medicare billing privileges can be reactivated." See also Medicare revocation and reinstatement readiness.
How IHS helps
This work sits in compliance services, one of three IHS practice lines alongside accreditation consulting and program development.
- Readiness assessment against Part 484 and section 489.28: what exists, what is missing, what a surveyor would ask for.
- A funds model and proof file built to 489.28(b) through (f), with a calendar.
- Enrollment exhibits and ownership disclosure worksheets for your authorized official to file.
- A policy set mapped to each condition of participation, including the acceptance-to-service policy, for your administrator and clinical manager to approve.
- Mock-survey tracers from referral to the record, and a dated moratorium watch note.
What you supply: the funds and bank attestations; the signatures; the administrator, clinical manager and staff; the clinical judgment in every policy; and counsel for transaction structure and the moratorium's reach.
The real limit: a policy set does not show a surveyor how your nurses work, and during the moratorium IHS cannot make an application possible. IHS does not file with or communicate with CMS, the contractor, a State survey agency or an accrediting organization for you.
What to have ready
- A funds model built to 42 CFR 489.28(b) and (c) on your projected first-three-month visits.
- Account statements and a bank officer's attestation, if offered, for every account holding funds, including borrowed funds in a separate account; a letter of credit from the lender for any line of credit (489.28(d) through (f)).
- A written split showing at least 50 percent non-borrowed funds for the certifying officer (489.28(d)).
- A proof binder you can produce within 30 days of a CMS or contractor request (42 CFR 424.535(a)(11)), and ownership records for each 5 percent owner who must give fingerprints (42 CFR 424.518).
- A policy set mapped to each Part 484 condition, with an intake workflow built to 42 CFR 484.55(a)(1) and (b)(1).
- The acceptance-to-service policy, annual operating budget and three-year capital plan (42 CFR 484.105(h) and (i)).
- If you are buying: the effective date of initial enrollment, the date of the most recent change in majority ownership, cost-report history and sale date, so counsel can test 424.550(b).
To see where your file stands against this list, start with the introductory call.
How it compares
This is not a recommendation. First, the survey route: both a State survey and approved accreditation are named in 424.540(b)(3)(i) for a deactivated agency, but for a prospective agency during the moratorium accreditation will not serve as the basis for deemed status (QSO-26-11). Our ACHC home health page covers one accreditor's program and the home health and hospice overview the wider field; this page covers the Medicare entry path. Second, buying an existing agency versus starting a new one: the 36-month rule and the moratorium both bear on a purchase, and counsel decides how.
What it costs
CMS: 42 CFR 424.514 requires the applicable application fee or a hardship exception request, sets the fee at the amount CMS calculates for the year of submission, and makes it nonrefundable except in listed cases, including an application denied as a result of a temporary moratorium. This page does not state the dollar amount; verify current fees with CMS and the Medicare contractor. Consulting: IHS scopes each engagement after a free introductory call.
What this is not
- It is not legal advice. IHS is a consulting firm, not a law firm; moratorium questions and transaction structure belong with your counsel.
- It is not a way around the moratorium; IHS cannot create an exception.
- It is not a guarantee of a survey result or enrollment decision. Those belong to CMS, the contractor, the State survey agency or the accrediting organization, and your organization files.
Frequently asked questions
How much money must a new home health agency show to enter Medicare?
Under 489.28(b), the funds must equal or exceed the greater of two amounts: one built from the average cost per visit of three or more comparable agencies and your projected visits for your first three months, and one from 22.5 percent of the comparison agencies' average visits. Under 489.28(c), CMS sets the figure through its intermediary, using projected visits of not less than 90 percent of the comparison agencies' average visits for a three-month period.
What counts as proof of initial reserve operating funds, and can borrowed money count?
Under 489.28(d), proof is account statements plus a bank officer's attestation, if the institution offers one, that the funds are in the account and immediately available. At least 50 percent of the required amount must be non-borrowed; the remainder may be borrowed or a line of credit from an unrelated lender, with proof under 489.28(e) and (f).
Is there a moratorium on new home health agencies right now?
Yes, according to the pages we read on November 5, 2026: no new home health agencies, branches or practice locations are enrolled unless the application reached the Medicare contractor before May 13, 2026. IHS reads the first six-month period as ending about November 13, 2026; check CMS for any extension.
Can accreditation substitute for the state survey during the moratorium?
No, for a prospective home health agency. QSO-26-11 states: "During the moratorium, a prospective Hospice or HHA's accreditation by a CMS approved Accrediting Organization (AO) program will not serve as the basis for Medicare participation through deemed status." It adds that "CMS regulations do not permit exceptions to a moratorium for individual providers or suppliers."
What happens if our application is denied because of the moratorium?
QSO-26-11 says it must be resubmitted once the moratorium is lifted, and that appeal under 42 CFR part 498 is limited to whether the moratorium applies. The application fee is nonrefundable except in listed cases, one being an application subsequently denied as a result of a temporary moratorium (424.514(d)).
What happens if we cannot document the funds when CMS asks?
Under 424.535(a)(11), CMS or its designated Medicare contractor may revoke an agency's billing privileges and provider agreement if, within 30 days of a request, the agency cannot furnish supporting documentation verifying that it meets the 489.28(a) funds requirement.
How soon must a nurse see a new patient?
Under 484.55(a)(1), a registered nurse conducts the initial assessment visit, held either within 48 hours of referral, or within 48 hours of the patient's return home, or on the physician or allowed practitioner-ordered start of care date. When therapy is the only service ordered, 484.55(a)(2) allows a rehabilitation professional to make the visit. The comprehensive assessment must be completed within 5 calendar days after the start of care (484.55(b)(1)).
Does buying an agency within 36 months of its enrollment or its last ownership change keep the agreement?
Not unless an exception in 424.550(b)(2) applies. A sale changing majority ownership within 36 months after initial enrollment, or within 36 months after the most recent change in majority ownership, means the agreement and billing privileges do not convey; the buyer must enroll as a new agency and obtain a State survey or approved accreditation.