How to start a home care agency in Alabama and reach your first client faster
Alabama has no state license for nonmedical home care, so new owners think they can open next week. For private pay families, they nearly can. Medicaid is different: the Elderly and Disabled Waiver runs through a contracting process with the Department of Senior Services, an on site review, nurse supervision, national background checks and electronic visit verification. Home health and hospice need a Certificate of Need first, and that is often the longest wait. We put all of it in the right order for you.
- Guides reviewed by Christine Ochimas, RN, LMFT, MBA
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- Christine OchimasRN, LMFT, MBA
- All three care typesNonmedical, home health, hospice
- Written to Alabama rulesAlabama Medicaid Administrative Code Chapter 560-X-36 and the approved E&D Waiver
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Updated November 2026 · Reviewed by Christine Ochimas, RN, LMFT, MBA
Answer two questions. See exactly what Alabama requires.
Nonmedical home care for E&D Waiver clients
- State license
- None for nonmedical care; E&D Waiver provider contract and Alabama Medicaid approval instead
- Who you deal with
- Alabama Department of Senior Services (ADSS) and its Area Agencies on Aging, the Alabama Medicaid Agency, and Alabama Select Network case managers
- Must haves
- ADSS contracting package, on site review, ADSS waiver training, Medicaid exemption from home health certification for unskilled services, nurse supervision of personal care, national background and registry checks, TB testing, yearly in service training, EVV
- Realistic time to first client
- Several months
Orientation for Alabama only. We confirm your exact path on the free call.
Three places new Alabama agencies lose months
Each one keeps you paying rent, insurance and payroll while no clients arrive.
Waiting for a contract you never applied for
There is no license to apply for, so owners open, hire and wait for Medicaid referrals. But E&D Waiver clients only come through agencies that have finished the ADSS contracting package, passed an on site review, attended waiver training and been approved by Alabama Medicaid. None of that starts until you ask for it.
What it costs: Months of rent, insurance and payroll with no Medicaid clients to serve.
Personal care without a nurse
Alabama Medicaid rules require personal care workers to be employed by a certified home health agency or another agency Medicaid approves, and supervised by a licensed nurse. The E&D Waiver pays for RN or LPN supervisory visits. Agencies built only around caregivers find out late that they need nursing time and a supervision schedule.
What it costs: A delayed contract, or billing that does not hold up when the operating agency audits your files.
A Certificate of Need that is not available
Home health and hospice both need a Certificate of Need from SHPDA. Home health need is set county by county, and a county shows need for one new agency only when the State Health Plan formula says so. The 2024 to 2027 plan also paused need determinations for in home hospice for at least two years.
What it costs: Capital spent on a clinical agency that cannot legally open in the counties you planned.
What does a delay cost your agency?
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Home care vs home health vs hospice in Alabama
The three sound alike and are regulated differently. The one you choose decides your regulator, staffing, startup capital and timeline.
| Topic | Nonmedical home care | Home health (skilled) | Hospice |
|---|---|---|---|
| What your staff do | Personal care, homemaker tasks, companion services, respite | Skilled nursing and therapy on a physician's written order, with home health aide services | Palliative and supportive care for people who are terminally ill, and their families |
| State license | None | None; Certificate of Need instead | ADPH hospice license (Ala. Admin. Code 420-5-17) |
| Certificate of Need | No | Yes, from SHPDA, by county | Yes, from SHPDA, by county |
| Main payers | Private pay, long term care insurance, E&D Waiver and other Medicaid waivers | Medicare, Alabama Medicaid, commercial insurance | Medicare hospice benefit, Alabama Medicaid |
| Medicare | Not covered | Accreditation or ADPH survey, then Medicare enrollment; check the CMS moratorium | Accreditation or ADPH survey, then Medicare enrollment; check the CMS moratorium |
| Key staff | Owner or manager; licensed nurse to supervise Medicaid personal care; trained caregivers | Administrator, Alabama licensed nurses, therapists, home health aides who meet 42 CFR 484.80 | Manager appointed by the governing body, Alabama licensed physician medical director, RN, social worker, counselor, volunteer coordinator |
| Startup capital | Lowest | Higher: Certificate of Need costs and clinical payroll before Medicare revenue | Highest: Certificate of Need, licensure and an interdisciplinary team before revenue |
| Time to first client | Weeks (private pay) to months (E&D Waiver) | Longest: Certificate of Need, survey, enrollment | Longest: Certificate of Need, licensure, survey, enrollment |
Most Alabama owners start with nonmedical care, because it needs no state license and no Certificate of Need. A home health or hospice agency can only open where SHPDA finds need or grants a CON, so check the county need numbers before you budget for clinical care. We plan both from day one so your policies and hiring grow with you instead of being rewritten.
Alabama requirements at a glance
| Nonmedical home care license | None at the state level. ADPH does not list nonmedical in home care among the facilities it licenses. |
|---|---|
| Home health | Not licensed by the State Board of Health. A Certificate of Need from SHPDA is required (Code of Ala. § 22-21-260 et seq.; Ala. Admin. Code 410-2-4-.07). |
| Hospice | ADPH license under Code of Ala. § 22-21-20 et seq. and Ala. Admin. Code 420-5-17, plus a SHPDA Certificate of Need (Ala. Admin. Code 410-2-3-.10) |
| Medicaid agency | Alabama Medicaid Agency |
| Main Medicaid home care route | Elderly and Disabled (E&D) Waiver, operated by the Alabama Department of Senior Services (ADSS) with the Area Agencies on Aging; case management through Alabama Select Network, the Integrated Care Network |
| Caregiver training | No state rule for private pay. E&D Waiver: initial training before services, then 12 hours a year for personal care and 6 hours a year for homemaker and companion workers |
| Background screening | E&D Waiver: national background check, references from previous employers, sex offender registry and Nurse Aide Registry checks for direct care staff |
| Electronic visit verification | Alabama Medicaid's EVV system for waiver personal care, homemaker, companion, respite and supervisory visits; required for Medicaid home health visits too |
| Medicare (home health, hospice) | Accreditation by a CMS approved organization or an ADPH survey, then Medicare enrollment; a CMS enrollment moratorium began May 13, 2026 |
| Entity filing and taxes | Alabama Secretary of State; Alabama Department of Revenue (withholding, Business Privilege Tax); Alabama Department of Workforce (unemployment) |
Summary of Alabama requirements as of November 2026. Rules change; confirm with each agency before filing.
Step by step: launching a home care agency in Alabama
The order matters. Steps 5 and 6 should start well before step 7: the ADSS contracting package, on site review and waiver training come before any E&D Waiver referral, and every caregiver needs checks on file first.
Form the business with the Alabama Secretary of State
File your LLC or corporation, get an EIN, register for payroll withholding with the Alabama Department of Revenue and for unemployment with the Alabama Department of Workforce. File the Business Privilege Tax initial return within two and a half months if you owe more than $100.
You do this; we give you the checklistGet county and city business licenses
Business licenses are issued by the probate judge or license commissioner in each county where you do business, and cities issue their own. Check every county and city you plan to serve.
You do this; we give you the checklistDecide your payer mix
Private pay, the E&D Waiver or both. Decide early whether you will offer personal care to Medicaid clients, because that brings nurse supervision. Use the path finder above.
Decided on your free consultationSet up insurance and employment basics
Arrange general and professional liability, workers' compensation, and auto coverage for caregivers who drive. Health plans, referral sources and long term care insurers will ask for proof.
You do this; we specify what is requiredWrite policies to the E&D Waiver standard
Even with no state license, adopt policies for service agreements, client rights, care plans, nurse supervision, background checks, training, TB testing, incident reporting and records, written to Alabama Medicaid Administrative Code Chapter 560-X-36 and the approved E&D Waiver.
We write this for youBuild the caregiver pipeline
Run a national background check, check references with previous employers, search the sex offender registry and the Nurse Aide Registry, follow Medicaid's TB testing policy, and give initial training before the first visit. Track yearly in service hours.
We set up the system and trackerApply to become an E&D Waiver provider
Ask ADSS for a contracting package and return it complete. ADSS or the Area Agency on Aging makes an on site visit, you attend ADSS waiver training, and because you are not a certified home health agency, ADSS asks the Medicaid Commissioner to exempt you so you can provide unskilled services. Then the contract is signed and you enroll with Alabama Medicaid.
We prepare and manage itSet up electronic visit verification
Alabama Medicaid's EVV system covers waiver personal care, homemaker, companion, respite and supervisory visits. Caregivers check in and out on a mobile app with GPS, with the client's phone as a backup, and claims flow from the confirmed visits. Train every caregiver before the first waiver visit.
We walk you through setup
Caregiver training and background checks in Alabama
Alabama sets no training or screening rule for private pay nonmedical caregivers, so your own policies become the standard. For Medicaid, the approved E&D Waiver (effective October 1, 2022) sets the rules for agency workers who provide personal care, homemaker and companion services, and the operating agency checks them at audit.
- Personal care workers: Initial training and orientation before providing services, then at least 12 hours of relevant in service training every calendar year. Employed by a certified home health agency or another agency approved by Alabama Medicaid, and supervised by a licensed nurse.
- Homemaker workers: Must be able to read and write and hold a valid picture ID. Initial training before services, then at least 6 hours every calendar year.
- Companion workers: Initial training and orientation, then at least 6 hours of in service training every calendar year. Companion services are only for clients who live alone, may not exceed four hours a day, and cannot be paid to a family member.
- Nurse supervision: The waiver pays for supervisory visits by an Alabama licensed RN or LPN, up to 60 minutes every 60 days, to check caregiver performance and client satisfaction.
- TB testing: Every waiver worker must follow Alabama Medicaid's current TB testing policy.
- Background and registry checks: National background checks for direct care staff and anyone with access to client records, plus reference checks with previous employers, the sex offender registry and the Nurse Aide Registry. The operating agency verifies them during audits.
- Home health and hospice aides: Medicare requires at least 75 hours of classroom and supervised practical training (or a competency evaluation or state nurse aide program) and 12 hours of in service training a year. Hospice aides also need the training in Ala. Admin. Code 420-5-17-.13.
Six mistakes that slow Alabama agencies down
We look for every one of these in the first week of an engagement.
Opening without asking ADSS for a contracting package
- What it costs
- Months of payroll with no E&D Waiver clients, because the contract, on site review and training have not started.
- How we prevent it
- Your first call ends with your exact Alabama path and the order to do it in.
Assuming no license means no standards
- What it costs
- The operating agency audits your files against the waiver. Missing training, TB or background records put payments at risk.
- How we prevent it
- We write your policy manual to Chapter 560-X-36 and the approved E&D Waiver.
Offering personal care with no nurse
- What it costs
- Medicaid personal care must be supervised by a licensed nurse, so the service cannot start or does not hold up at audit.
- How we prevent it
- A supervision schedule and a nurse role built into your plan from the start.
Billing companion care outside the rules
- What it costs
- Companion services are only for clients who live alone, up to four hours a day. Claims outside that are recovered.
- How we prevent it
- Service definitions and scheduling checks that match each client's plan of care.
Drifting into skilled care
- What it costs
- Skilled nursing at home belongs to a home health agency with a Certificate of Need, and nurses must practice within Alabama nursing law.
- How we prevent it
- Clear service definitions so nonmedical caregivers never perform skilled tasks.
Planning home health or hospice before checking CON and the moratorium
- What it costs
- Capital spent on a clinical agency that has no Certificate of Need and, while the CMS moratorium lasts, cannot enroll in Medicare.
- How we prevent it
- We check county need, the CON calendar and the CMS moratorium status before you commit capital.
In a free 30 minute call we confirm your Alabama path, flag the mistakes that apply to your plan, and give you a fixed price to handle the rest.
Alabama launch packages
Three fixed price packages, matched to the path you choose. Your exact price is quoted in writing after your free call, before any work starts.
Private pay launch
For nonmedical agencies serving families who pay privately.
- Alabama path and a dated launch plan
- Policy and procedure manual written to Alabama Medicaid Administrative Code Chapter 560-X-36 and the approved E&D Waiver
- Service agreement, client rights and care plan forms
- Caregiver hiring and screening workflow
- Google Business Profile setup
E&D Waiver ready agency
Everything in Private pay launch, plus the Medicaid route.
- Policies aligned to E&D Waiver requirements
- Caregiver training and background check tracker
- Medicaid provider enrollment
- Credentialing packets for the Alabama Department of Senior Services and the Alabama Medicaid Agency
- Survey and audit readiness
- Alabama city pages for local search
Home health and Medicare
For skilled home health. Hospice is scoped separately.
- Staffing and capital timeline
- Policies written to SHPDA rules and the Medicare Conditions of Participation
- License application and inspection readiness
- Accreditation survey preparation
- Medicare and Medicaid enrollment support
Every package: one fixed price agreed in writing · you own 100% of your agency · no franchise fees or royalties.
On your own vs a franchise vs Lunaria
| Topic | On your own | Home care franchise | With Lunaria |
|---|---|---|---|
| Who owns the business | You | You, under the franchisor's brand and rules | You, 100% |
| Ongoing fees | None | Royalties and brand fees, usually a share of revenue | None. One fixed project fee |
| Knowing what Alabama requires | Pieced together from manuals and forums | A national playbook, adapted | Confirmed on your first call, then in writing |
| Policy manual | A template, often from another state | The franchisor's standard manual | Written to Alabama Medicaid Administrative Code Chapter 560-X-36 and the approved E&D Waiver |
| Medicaid credentialing | One application at a time | Varies by franchisor | Packets for the Alabama Department of Senior Services and the Alabama Medicaid Agency prepared together |
| Your brand and marketing | Up to you | The franchisor's brand, with territory limits | Your brand, plus local search set up for you |
The Alabama home care startup checklist
Every Alabama step in order: business setup, your payer path, policies, caregiver screening and training, Medicaid enrollment and getting found. The items to start first are starred.
- Choose your care type and payer mix (private pay, E&D Waiver, or both)
- Form your LLC or corporation with the Alabama Secretary of State
- Get an EIN; register for withholding (Department of Revenue) and unemployment (Department of Workforce)
- File the Business Privilege Tax initial return within two and a half months if you owe more than $100
- Get county business licenses from the probate judge or license commissioner, plus city licenses
- and 13 more steps
Christine Ochimas, RN, LMFT, MBA
Christine founded Lunaria Care Consulting to give nurses and caregivers a direct route from "I want my own agency" to a compliant business with clients. She reads state requirements the way a reviewer does and writes policies the way a nurse would actually use them.
- We serve owners in all 50 states and DC, with a plan written for Alabama
- We help through enrollment and survey readiness, not just the application
- We tell you what we cannot promise: no one can guarantee a state or health plan decision
Have these ready for your consultation
- The care you want to provide and the clients you want to serve
- The Alabama cities or counties you plan to cover
- Where you are now: idea, business formed or already operating
- Who you expect to pay: families, E&D Waiver, Medicare
- Your target opening month and rough budget
No client or patient records. We never need them for a first call.
What it costs to start a home care agency in Alabama
| Item | Notes |
|---|---|
| State license | None for nonmedical care or home health. ADPH charges $240 for an initial hospice license application (fee schedule effective July 30, 2016), and licenses expire every December 31. Check current fees with ADPH. |
| Entity formation and business licenses | Secretary of State filing fee, plus county and city business license fees, which vary by location |
| Business Privilege Tax | No tax or return when the tax due is $100 or less (taxable years after 2023); otherwise based on your entity |
| Background and registry checks | National background check vendor fees for each caregiver |
| Training and TB testing | Initial and yearly in service training, plus TB testing per Alabama Medicaid policy |
| Nurse supervision | RN or LPN time for supervisory visits on Medicaid personal care |
| Insurance | Liability, workers' compensation, auto coverage |
| Certificate of Need (home health, hospice) | SHPDA filing fees plus the cost of preparing and defending the application. Check current fees with SHPDA. |
| Accreditation (home health, hospice) | Accrediting organization application and survey fees |
| Operating reserve | Covers payroll, rent and insurance while the waiver contract or Medicare enrollment is pending |
Fees change. Confirm current amounts with each agency before budgeting.
How long it takes in Alabama
Weeks, once the business, county and city licenses, insurance and hiring process are in place.
Several months: the ADSS contracting package, on site review, waiver training, the Medicaid exemption and contract, then Medicaid enrollment.
Longest: Certificate of Need first, then ADPH licensure for hospice, a certification survey and Medicare enrollment, subject to the CMS moratorium.
Private pay demand in Alabama centers on the larger metro areas, such as Birmingham, Huntsville, Mobile, Montgomery and Tuscaloosa, where families search by city and county for help with a parent. In rural counties, drive times between clients make reliable staffing the hard part and the selling point. E&D Waiver clients live in every part of the state, and each Area Agency on Aging region has its own network of providers and case managers, so introductions to local case managers matter. Many families also arrange care from out of state, which makes a strong Google Business Profile and clear county and city pages worth building early.
Frequently asked questions
Do you need a license to start a nonmedical home care agency in Alabama?
No. Alabama has no state license for nonmedical home care, and ADPH does not list it among the facilities it licenses. You still need a business registration, county and city business licenses, tax and payroll accounts and insurance. To serve Medicaid clients you need an E&D Waiver provider contract and Alabama Medicaid approval.
Does Alabama license home health agencies?
No. ADPH says home health agencies are not required to be licensed by the State Board of Health, and the State Health Plan says the same. Instead, a new home health agency needs a Certificate of Need from SHPDA, and Medicare certification to bill Medicare.
Who licenses hospices in Alabama?
The Alabama Department of Public Health, through the Bureau of Health Provider Standards, under Code of Ala. § 22-21-20 et seq. and Ala. Admin. Code 420-5-17. A hospice must be physically located in Alabama, and it also needs a Certificate of Need from SHPDA.
Does Alabama require a Certificate of Need for home health or hospice?
Yes, for both. SHPDA reviews need county by county under the State Health Plan. For home health, a county shows need for one new agency only when the plan's formula reaches its threshold. For in home hospice, the 2024 to 2027 plan paused need determinations for at least two years from June 14, 2024, so check the current status with SHPDA.
How do Alabama home care agencies get E&D Waiver clients?
By becoming an approved provider. ADSS sends a contracting package, then ADSS or the Area Agency on Aging makes an on site visit, you attend waiver training, Medicaid exempts you from the home health certification requirement for unskilled services, and the contract is signed. Case managers then authorize services under each client's plan of care, and clients choose among approved providers.
Do Alabama caregivers need certification?
Not for private pay nonmedical care. E&D Waiver workers need initial training before services and yearly in service hours: 12 for personal care, 6 for homemaker and companion workers. Home health and hospice aides must meet Medicare's aide training rules.
Is the CMS Medicare moratorium still in effect?
CMS paused new Medicare enrollment of home health agencies and hospices nationwide from May 13, 2026, for six months. It covers initial enrollments, new branches and some ownership changes, and may be extended in six month steps. It may have ended or been extended by the time you read this, so check its status with CMS before you plan on Medicare revenue.
Is a franchise a better way to start a home care agency in Alabama?
A franchise gives you a brand and playbook in exchange for fees and ongoing royalties. Starting independently with Lunaria costs one fixed price, and you own 100% of your agency with no franchise fees or royalties.
How much does Alabama home care consulting cost?
Lunaria charges one fixed price per engagement, based on your path: private pay, the E&D Waiver or home health and Medicare. You receive the price in writing after a free 30 minute consultation. There are no hourly charges.
Do you only work in Alabama?
No. Lunaria works with owners in all 50 states and DC, so you can expand into a second state with the same team.
Sources checked for this guide (28)
- ADPH Health Care Facilities Descriptions (home health agencies not required to be licensed)
- ADPH Licensure Application page (hospice application and $240 fee, effective 07/30/16)
- ADPH Bureau of Health Provider Standards
- Ala. Admin. Code Chapter 420-5-17, Hospices (revised 5/15/22), with Code of Ala. §§ 22-21-20 to 22-21-24 in the appendix
- Ala. Admin. Code r. 410-2-4-.07, Home Health, 2024-2027 State Health Plan (effective 6/14/2024)
- Ala. Admin. Code r. 410-2-3-.10, In Home Hospice Services, 2024-2027 State Health Plan (effective 6/14/2024)
- Ala. Admin. Code r. 410-2-4-.07 (Cornell LII copy)
- Alabama Legislature, 2025 SB285 as introduced (shows current Code of Ala. § 22-21-260 definition of health care facility, including hospices and home health agencies; bill died)
- Alabama Medicaid Agency Administrative Code Chapter 560-X-36, E&D Waiver (revised 06/12/2023)
- Alabama Medicaid Agency Administrative Code Chapter 560-X-57, SAIL Waiver (revised 05/15/23)
- Elderly and Disabled Waiver application AL.0068.R08.00, approved effective 10/01/22 (posted by ADSS)
- ADSS Medicaid Waiver Programs (E&D, ACT, Personal Choices, Integrated Care Network)
- Alabama Department of Mental Health, Electronic Visit Verification
- CMS EVV compliance determination letter to Alabama Medicaid, January 7, 2021
- Alabama Department of Revenue, Business Privilege Tax and Corporate Shares Tax
- Alabama Department of Revenue, business privilege licenses (county probate judge or license commissioner)
- Alabama Secretary of State, Business Entities
- Federal Register 2026-09717, nationwide moratorium on enrollment of home health agencies
- Federal Register 2026-09718, nationwide moratorium on enrollment of hospices
- CMS Home Health and Hospice Nationwide Moratorium Q&As (last revised 7/09/26)
- CMS Provider Enrollment Moratoria page (last modified 08/27/2026)
- 42 CFR 484.80, home health aide services (Cornell LII)
- 42 CFR 418.76, hospice aide services (Cornell LII)
- 42 CFR Part 484, home health Conditions of Participation (Cornell LII)
- 42 CFR Part 418, hospice care (Cornell LII)
- CMS-855A Medicare enrollment application, institutional providers
- LegiScan, Alabama 2025 SB285 status (secondary, pointer only)
- Vitable, Alabama home care licensure summary (secondary, pointer only)
This guide is general information and reflects Alabama requirements as we understood them in November 2026. Requirements change. Confirm current rules, fees and procedures with the Alabama Medicaid Agency, the Alabama Department of Senior Services, the Alabama Department of Public Health, SHPDA and CMS before filing. Lunaria Care Consulting provides professional consulting services and does not provide legal advice.
Other states: see all state guides. What we do: licensing, compliance, Medicaid enrollment and local search marketing.