How to start a home care agency in Tennessee and reach your first client faster
Tennessee licenses nonmedical home care, but not through the health department. The Personal Support Services Agency license comes from the behavioral health department, or from the Department of Disability and Aging if most of your clients have an intellectual or developmental disability. Then TennCare registration, a contract with each CHOICES health plan, background and registry checks and electronic visit verification decide when Medicaid clients start. Home health and hospice add a Certificate of Need. 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 Tennessee rulesRule 0940-05-38 and TennCare health plan provider manuals
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Updated November 2026 · Reviewed by Christine Ochimas, RN, LMFT, MBA
Answer two questions. See exactly what Tennessee requires.
Nonmedical home care for TennCare CHOICES members
- State license
- Personal Support Services Agency license (Rule 0940-05-38), then TennCare registration and health plan contracts
- Who you deal with
- TDMHSAS or DDA, the Division of TennCare, and each CHOICES health plan (BlueCare Tennessee, UnitedHealthcare Community Plan, Wellpoint)
- Must haves
- PSSA license, TennCare provider registration, a contract and credentialing with each health plan, background and registry checks, EVV with GPS check in and check out
- Realistic time to first client
- Several months
Orientation for Tennessee only. We confirm your exact path on the free call.
Three places new Tennessee agencies lose months
Each one keeps you paying rent, insurance and payroll while no clients arrive.
Applying to the wrong department
Owners call the Department of Health, which does not license nonmedical home care. The PSSA license comes from TDMHSAS for agencies whose clients are mostly older adults or people with a mental illness, and from DDA when 50% or more of clients have an intellectual or developmental disability. You attest to your expected client mix on the application, and renewals go to the department that licenses the majority of your clients.
What it costs: Weeks lost on the wrong application, and a license category that does not match the clients you actually serve.
The license is only the first gate for TennCare
TennCare CHOICES home care is delivered through the TennCare health plans, and each plan contracts with and credentials your agency separately. You also register with the Division of TennCare and set up electronic visit verification before visits can be paid. Agencies that start this after the license arrives carry staff with no Medicaid clients.
What it costs: Months of rent, insurance and payroll carried by your operating reserve while plan contracts are pending.
Caregivers on the schedule before the checks are back
Tennessee law requires the criminal background check to be completed before a worker has any direct contact with clients, and the Abuse Registry and Sexual Offender Registry must be checked before direct contact too. References and a five year work history must be checked, and every worker must show basic competency in seven areas before their first visit.
What it costs: A licensing deficiency, a case you cannot staff, and a caregiver who may take another offer while they wait.
What does a delay cost your agency?
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Home care vs home health vs hospice in Tennessee
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 | Help with eating, dressing, bathing, toileting, mobility and transfers, housekeeping, meals, shopping, community access, medication reminders | Skilled nursing, therapy, medical social services and home health aide care ordered for a patient at home | Palliative and supportive care for people who are terminally ill, and their families |
| State license | Personal Support Services Agency license from TDMHSAS or DDA (Rule 0940-05-38) | HFC home care organization license for home health services (Rule 0720-27) | HFC home care organization license for hospice services (Rule 0720-28) |
| Certificate of Need | No | Yes, from HFC (Tenn. Code Ann. § 68-11-1607), with narrow exemptions | Yes, from HFC (Tenn. Code Ann. § 68-11-1607) |
| Main payers | Private pay, TennCare CHOICES health plans, long term care insurance | Medicare, TennCare health plans, commercial insurance | Medicare hospice benefit, TennCare |
| Medicare | Not covered | Accreditation or state survey, then Medicare enrollment; check the CMS moratorium | Accreditation or state survey, then Medicare enrollment; check the CMS moratorium |
| Key staff | A named person responsible for the agency; caregivers with documented competency; RN for medication assistance training | Governing body, qualified administrator, RN supervising skilled nursing and aides, trained home health aides | Administrator, physician medical director, RN, social worker, counselor, interdisciplinary team |
| Startup capital | Lowest | Higher: Certificate of Need and clinical payroll before revenue | Highest: Certificate of Need and interdisciplinary team before revenue |
| Time to first client | Months (license first) to several months (TennCare) | Longest: Certificate of Need, licensure, survey, enrollment | Longest: Certificate of Need, licensure, survey, enrollment |
Many Tennessee owners start with a PSSA, build cash flow and a caregiver team, then weigh a Certificate of Need for home health. Under Tenn. Code Ann. § 33-2-420, a licensed home care organization does not also need a PSSA license to provide personal support services, and a PSSA does not need a home care organization license for them. We plan both from day one so your policies and hiring grow with you instead of being rewritten.
Tennessee requirements at a glance
| Nonmedical home care license | Personal Support Services Agency (PSSA) license under Tenn. Code Ann. § 33-2-403 and Rule 0940-05-38 |
|---|---|
| Who issues it | TDMHSAS Office of Licensure (regional offices in Memphis, Nashville and Knoxville) when 50% or more of clients are aged or have a mental illness or substance use diagnosis; the Department of Disability and Aging (DDA) when 50% or more have an intellectual or developmental disability (Rule 0465-02-17) |
| Home health and hospice licensing | Tennessee Health Facilities Commission (HFC): home care organization license, Rule 0720-27 (home health) and Rule 0720-28 (hospice) |
| Certificate of Need | Required from HFC to start home health or hospice (Tenn. Code Ann. § 68-11-1607); not required for a PSSA |
| Medicaid agency | Division of TennCare; long term care at home through TennCare CHOICES, run by the TennCare health plans |
| Caregiver training | Basic competency in seven areas before working, training specific to each client, job related training every year; RN supervised training before medication assistance |
| Background screening | Criminal background check before direct contact (Tenn. Code Ann. § 33-2-1202), Abuse Registry and Sexual Offender Registry before direct contact and every year, reference and work history checks |
| Electronic visit verification | Required by the TennCare health plans for applicable CHOICES home care services, with GPS check in and check out; CareBridge is offered at no cost or you can use a third party system |
| Medicare (home health, hospice) | Accreditation by a CMS approved organization or a state survey, then Medicare enrollment; new enrollment paused by CMS since May 13, 2026 |
| Entity filing | Tennessee Secretary of State, plus business tax registration and a county or city business license |
Summary of Tennessee requirements as of November 2026. Rules change; confirm with each agency before filing.
Step by step: launching a home care agency in Tennessee
The order matters. Your caregiver screening and policies should be ready before the license arrives, and TennCare registration and health plan contracts should start the day you have it, because plans credential you only after you are licensed.
Form the business with the Tennessee Secretary of State
File your LLC or corporation, get an EIN, register for business tax with the Department of Revenue or your county clerk, get your county and city business license, and set up unemployment insurance with the Department of Labor and Workforce Development.
You do this; we give you the checklistDecide your client mix and payer mix
Your expected client population decides which department licenses you: TDMHSAS for mostly older adults or people with a mental illness, DDA for mostly people with an intellectual or developmental disability. Then choose private pay, TennCare CHOICES or both. Use the path finder above.
Decided on your free consultationWrite policies to Rule 0940-05-38
The rules list what your manual must cover: services and enrollment criteria, an organizational chart, a backup staffing plan for absent workers, client rights and grievances, confidentiality, emergencies, abuse and incident reporting, client funds, medication assistance, transportation, lifts and gait belts, and the client population policy.
We write this for youArrange insurance and consumer documents
Get liability insurance covering the agency and its workers, plus workers' compensation and vehicle coverage for anyone who drives clients. Prepare the consumer notice, the worker notice and the rights acknowledgment the rules require before service begins.
You do this; we specify what is requiredApply for the PSSA license
Send the initial application, fact sheet, background check and privacy statement form, financial statement and client population attestation to the TDMHSAS regional office for your county, then pay the invoiced fee. PSSAs need no life safety inspection, and the initial review is an electronic desk audit.
We prepare the applicationBuild the caregiver pipeline
Collect a five year work history and three references, contact them, run the criminal background check and registry searches before any client contact, and document competency in the seven required areas. Keep a current roster of every worker, including backups.
We set up the system and trackerRegister with TennCare and contract with CHOICES health plans
Register on the TennCare Provider Registration site, then apply to BlueCare Tennessee, UnitedHealthcare Community Plan and Wellpoint and complete each plan's credentialing. Plan contracts, not the license, are what bring CHOICES referrals.
We prepare every plan's packetSet up electronic visit verification
CHOICES home care visits must be checked in and out with GPS. Since August 1, 2025 agencies can use CareBridge at no cost or a third party EVV system that connects to it. Plans expect at least 90% of billed visits to carry GPS data.
We walk you through setup
PSSA caregiver training and background checks
Tennessee does not certify PSSA caregivers, but Rules 0940-05-38-.07 and .08 and Tenn. Code Ann. § 33-2-1202 set firm screening and training standards. TDMHSAS checks them in personnel files at the desk audit and later reviews.
- Basic competency before working: Every caregiver demonstrates competency in seven areas before their first visit: observing and reporting changes, abuse and neglect prevention and reporting, client rights, universal precautions and infection control, personal hygiene help, client safety, and emergency and disaster procedures.
- Client specific and yearly training: Documented training specific to each client's needs in self care, household management, community living and service delivery, plus job related training at least once a year.
- Medication assistance: Reminders, opening packaging and similar help are allowed only after written client authorization and documented training given by or under the general supervision of an RN. Injections and medication administration are not allowed.
- Medication administration certification: Since Public Chapter 730 of 2024, TDMHSAS licensed PSSAs may have unlicensed staff certified to administer certain medications through DDA's 20 hour class. The certificate lasts three years, and the agency needs a medication safety policy.
- Criminal background check: Completed before any direct contact with clients, using TBI or FBI fingerprints or a Tennessee licensed private investigation company. The agency pays for it.
- Registry checks: The Tennessee Abuse Registry and the Sexual Offender Registry are checked before direct contact and every year. Anyone listed may not be hired or allowed to provide services.
- References and work history: A five year work history and three personal references, one known to the applicant for five years. Contact the most recent employer and talk directly with at least two references before hiring.
- Not required by licensure: TDMHSAS does not require CPR or a TB test for PSSA workers, though a health plan contract may. Workers must be 18 or older.
Six mistakes that slow Tennessee agencies down
We look for every one of these in the first week of an engagement.
Applying to the wrong department for your client mix
- What it costs
- A license that does not match the clients you serve, and a renewal that has to move to the other department.
- How we prevent it
- Your first call settles your expected client mix and the right department before anything is filed.
Starting a worker before the checks are back
- What it costs
- A licensing deficiency, since the background check and both registry checks must come before any direct contact.
- How we prevent it
- A tracker that blocks scheduling until the background check, registry searches and references are on file.
Medication help without RN supervised training
- What it costs
- One of the most common PSSA deficiencies, along with missing written authorization from the client.
- How we prevent it
- We build medication assistance training, authorization forms and personnel file proof into your system.
Doing tasks a PSSA cannot do
- What it costs
- Blood pressure checks, blood sugar tests, dressing changes, filling pill planners and similar tasks are outside a PSSA license, which risks enforcement.
- How we prevent it
- Clear service definitions and caregiver training so nonmedical staff never perform skilled tasks.
Contracting with only one health plan
- What it costs
- Referrals from only one plan's CHOICES members in your area.
- How we prevent it
- We prepare packets for BlueCare Tennessee, UnitedHealthcare Community Plan and Wellpoint at once.
Planning home health without a Certificate of Need
- What it costs
- A home health or hospice plan that cannot be licensed until HFC grants a Certificate of Need or an exemption applies.
- How we prevent it
- We check Certificate of Need and exemptions on your first call and plan the order of steps around them.
In a free 30 minute call we confirm your Tennessee path, flag the mistakes that apply to your plan, and give you a fixed price to handle the rest.
Tennessee 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.
- Tennessee path and a dated launch plan
- Policy and procedure manual written to Rule 0940-05-38 and TennCare health plan provider manuals
- Service agreement, client rights and care plan forms
- Caregiver hiring and screening workflow
- Google Business Profile setup
TennCare CHOICES ready agency
Everything in Private pay launch, plus the Medicaid route.
- Policies aligned to TennCare CHOICES requirements
- Caregiver training and background check tracker
- Medicaid provider enrollment
- Credentialing packets for each TennCare CHOICES health plan
- Survey and audit readiness
- Tennessee city pages for local search
Home health and Medicare
For skilled home health. Hospice is scoped separately.
- Staffing and capital timeline
- Policies written to HFC 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 Tennessee 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 Rule 0940-05-38 and TennCare health plan provider manuals |
| Medicaid credentialing | One application at a time | Varies by franchisor | Packets for each TennCare CHOICES health plan 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 Tennessee home care startup checklist
Every Tennessee 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, expected client mix and payer mix
- Form your LLC or corporation with the Tennessee Secretary of State
- Get an EIN, register for business tax and get your county and city business license
- Register for unemployment insurance with Labor and Workforce Development
- Buy liability insurance for the agency and workers, workers' compensation and vehicle coverage
- and 14 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 Tennessee
- 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 Tennessee cities or counties you plan to cover
- Where you are now: idea, business formed or already operating
- Who you expect to pay: families, TennCare CHOICES, 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 Tennessee
| Item | Notes |
|---|---|
| PSSA license fee | The TDMHSAS fee schedule (Rule 0940-05-02-.05) lists $810 per site for one distinct category of nonresidential service, due with each initial and renewal application and nonrefundable. TDMHSAS sends an invoice after it receives your forms. Check the current fee with your regional office. |
| Home health or hospice license | HFC rules list a nonrefundable annual license fee of $1,404 for a home care organization providing home health (Rule 0720-27-.02) or hospice (Rule 0720-28-.02). Check current fees with HFC. |
| Certificate of Need (home health, hospice) | HFC application fees and the cost of preparing the application. Check current fees with HFC. |
| Entity formation and local licenses | Secretary of State filing fee, plus county and city business license fees |
| Background and registry checks | TBI or FBI fingerprint fees or a licensed private investigation company, paid by the agency for every worker |
| Training | RN time for medication assistance training; DDA charges PSSAs $50 per person for the 20 hour medication administration class if you choose it |
| Insurance | Liability coverage for the agency and workers, workers' compensation, vehicle coverage |
| EVV and scheduling software | CareBridge is offered at no cost; a third party EVV system is paid by the agency |
| Operating reserve | Covers payroll, rent and insurance while the license, health plan contracts or Medicare enrollment are pending |
Fees change. Confirm current amounts with each agency before budgeting.
How long it takes in Tennessee
Months: the PSSA license must be issued before you serve clients, though the initial review is a desk audit rather than an on site visit.
Several months: PSSA license, then TennCare registration and contracting and credentialing with each health plan.
Longest: Certificate of Need, HFC licensure and inspection, certification survey and Medicare enrollment, subject to the CMS moratorium.
Tennessee's demand is spread across four large metro areas, Nashville, Memphis, Knoxville and Chattanooga, and many smaller cities and rural counties in between. TDMHSAS runs its licensing through West, Middle and East Tennessee regional offices, and the same three regions shape how families and referral sources think about care. In rural counties reliable staffing and a willingness to travel are your selling points. Many families search for care for a parent from out of state, so a strong Google Business Profile and clear pages for each city and county you serve matter.
Frequently asked questions
Do I need a license to start a nonmedical home care agency in Tennessee?
Yes. Agencies providing personal support services need a Personal Support Services Agency license under Tenn. Code Ann. § 33-2-403 and Rule 0940-05-38. Exemptions include serving only family members, serving one person without holding yourself out to the public, and offering only housekeeping, transportation or delivery.
Who issues the PSSA license in Tennessee?
TDMHSAS licenses agencies where 50% or more of clients are aged or have a mental illness or substance use diagnosis. DDA, the Department of Disability and Aging, licenses agencies where 50% or more have an intellectual or developmental disability. Either license lets you also serve people with physical or other disabilities.
Who licenses home health and hospice agencies in Tennessee?
The Tennessee Health Facilities Commission licenses them as home care organizations under Tenn. Code Ann. Title 68, Chapter 11, Part 2. Home health rules are in Rule 0720-27 and hospice rules are in Rule 0720-28. Licenses expire every year on the anniversary of issue.
Does Tennessee require a Certificate of Need for home health or hospice?
Yes. Tenn. Code Ann. § 68-11-1607 requires a Certificate of Need from the Health Facilities Commission to start home health or hospice services. A PSSA does not need one. Narrow exemptions exist for home health limited to patients under 18 or to the federal EEOICPA program, and for certain economically distressed counties.
Do Tennessee caregivers need certification?
No state certificate is required for PSSA caregivers. They must be 18 or older, pass a criminal background check and registry checks before client contact, show competency in seven areas before working and train every year. Medication assistance needs RN supervised training.
How do Tennessee home care agencies get TennCare clients?
By holding a PSSA license, registering with the Division of TennCare and contracting with the TennCare health plans: BlueCare Tennessee, UnitedHealthcare Community Plan and Wellpoint. CHOICES serves adults 65 and older and adults 21 and older with a physical disability, and each member's care coordinator authorizes services.
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 was set to end around November 13, 2026 unless CMS extended it, so check its current status before you plan Medicare billing. It does not affect nonmedical PSSAs.
Is a franchise a better way to start a home care agency in Tennessee?
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 Tennessee home care consulting cost?
Lunaria charges one fixed price per engagement, based on your path: private pay, TennCare CHOICES 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 Tennessee?
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 (32)
- TDMHSAS Office of Licensure: Become a Licensed Provider (forms, desk audit for PSSAs, regional offices)
- TDMHSAS PSSA Provider Information 2025 (background checks, deficiencies, medication administration, FAQs)
- Rule 0940-05-38-.01, PSSA definitions (Cornell LII)
- Rule 0940-05-38-.03, scope and exemptions (Cornell LII)
- Rule 0940-05-38-.04, application and client population attestation (Cornell LII)
- Rule 0940-05-38-.05, governance (Cornell LII)
- Rule 0940-05-38-.06, policies and procedures (Cornell LII)
- Rule 0940-05-38-.07, personnel requirements (Cornell LII)
- Rule 0940-05-38-.08, training requirements (Cornell LII)
- Rule 0940-05-02-.05, TDMHSAS licensure fees (Cornell LII)
- Rule 0465-02-03-.11, DDA personal support services agencies (Cornell LII)
- Tenn. Code Ann. § 33-2-403, licensure of support services (FindLaw)
- Tenn. Code Ann. § 33-2-420, PSSA and home care organization licenses (FindLaw)
- Tenn. Code Ann. § 33-2-1202, background checks (FindLaw)
- Tenn. Code Ann. § 68-11-1607, Certificate of Need (FindLaw)
- Health Facilities Commission rules, Title 0720 chapter list (Cornell LII)
- Rule 0720-27-.02, home health licensing procedures and fee (Cornell LII)
- Rule 0720-27-.04, home health administration (Cornell LII)
- Rule 0720-27-.06, home health basic agency functions (Cornell LII)
- Rule 0720-28-.02, hospice licensing procedures and fee (Cornell LII)
- Rule 0720-39-.01, Abuse Registry (Cornell LII)
- TennCare Benefit Packages (last updated April 20, 2026)
- TennCare III quarterly monitoring report, January to March 2025 (CHOICES enrollment targets, health plans)
- Wellpoint Provider Quick Reference Guide for TennCare CHOICES (EVV open model August 1, 2025, TennCare provider registration)
- CMS QSO-26-11, six month national moratoria on hospice and HHA enrollment
- CMS provider enrollment moratoria page
- Federal Register 2026-09717, moratoria on enrollment of home health agencies
- Federal Register 2026-09718, moratorium on enrollment of hospices
- CMS accreditation and approved accrediting organizations
- 42 CFR 484.80, home health aide training (Cornell LII)
- 42 CFR 418.56, hospice interdisciplinary group (Cornell LII)
- Tennessee Department of Revenue, business tax registration and licensing (returned 403 today, pointer only)
This guide is general information and reflects Tennessee requirements as we understood them in November 2026. Requirements change. Confirm current rules, fees and procedures with TDMHSAS, the Department of Disability and Aging, the Health Facilities Commission, the Division of TennCare 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.