HOME HEALTH AGENCIES · IN-HOME CARE
For licensed home health agencies and non-medical home care providers in California — Medicare-certified, Medi-Cal contracted, or private-pay. The payroll burden, the Medicare cost report, and the surety-bond cycle all need to be on one CPA's desk.
WHAT HOME HEALTH AGENCIES LIVE WITH
Home health agencies look like staffing companies on payroll day and like Medicare providers on billing day. Six places that hybrid breaks generic accounting.
The Patient-Driven Groupings Model pays in 30-day periods with HHRG case-mix scoring. RAP and final claims have their own AR aging, denial patterns, and revenue-recognition timing. Generic AR aging hides what's actually collectible.
Home health and home care agencies were AB 5's biggest tax-exposure category in California. The ABC test rarely supports 1099 nurses, HHAs, or CNAs. Most agencies pre-AB 5 still carry historical exposure on the books.
Field staff are paid for drive time, mileage, and weekend/night differentials — but these don't hit the same way in QuickBooks. Mis-categorization shows up as inflated payroll without the offsetting reimbursement structure.
Medicare-certified HHAs carry $50K surety bonds plus CHAP, ACHC, or Joint Commission accreditation costs. These are amortized over the accreditation cycle, not expensed in year one — most generic CPAs expense the whole thing.
Medicare cost reports require GL data structured around cost centers, allocations, and per-visit costs. Books built for cash-basis tax reporting don't produce a clean cost report — you'll pay a consultant to rebuild it.
Each payer has its own auth process, billing cycle, contractual write-offs, and net collection rate. Lumping them into "AR" hides which contracts are profitable and which aren't.
WHAT WE DO
Accounting, tax, and advisory — integrated for home health and home care owners.
Monthly close that mirrors how a home health agency actually earns, spends, and gets paid.
Federal + CA returns with entity structure and elections built around home health economics.
Owner-level guidance for growth, payor contracting, and the transitions every home health owner faces.
What you can expect
You work with a CPA, not an associate.
Scoped upfront and committed in writing.
Response within one business day.
Quarterly planning — not just at deadlines.
What we do
We work with California home health agencies on the financial side of running a Medicare-regulated, AB 5-exposed operation — PDGM cash flow, surety bonds, and caregiver classification.
30-day episode payment modeling, RAP elimination, and operating cash reserves planning.
California $50K agency surety bond accounting, plus Medicare bonding requirements.
RN, LVN, and CNA classification under California ABC test — reducing back-pay and audit risk.
Annual cost report compliance, including allowable cost analysis and reporting.
Operating across multiple California counties with proper reporting and entity structure.
Caregiver payroll, agency P&L with patient-mix detail, and year-end tax coordination.
Related services
Outpatient PT/OT/SLP practices that serve home health patients.
Explore →How we work with California healthcare practitioners across specialties.
Explore →Year-round tax planning for owner-operators — entity, comp, and reserves.
Explore →Related insights
Home Health
California home health agencies face PDGM billing complexity, AB 5 nurse classification exposure, surety bond amortization, and Medicare cost report requirement
PT · OT · SLP
California PT, OT, and SLP practices face Medicare’s 8-minute rule, AB 5 contractor exposure, and teletherapy nexus. The tax moves owners actually need.
NPA
California NPAs face unique tax exposure: AB 5 contractor reclassification, deferred revenue on district contracts, and a brutal summer cash gap. A CPA-led play
Common Questions
Yes. The accounting frameworks are different (PDGM billing for HHA vs hourly billing for non-medical), but the entity structure questions, payroll classification questions, and growth-stage questions are the same. We adapt the engagement to your license type and payor mix.
For most home health and home care agencies, the ABC test does not support 1099 status for clinical or caregiver staff who deliver the service. The exceptions are narrow. We help reclassify cleanly, model the cost impact, and coordinate with employment counsel on any historical exposure.
Medicare-certified HHAs that practice the profession (skilled nursing, therapy) typically need a Professional Corporation in California. Non-medical home care can use LLC. S-corp election is layered on top once compensation hits the breakeven. We model the entity structure against your service mix and ownership.
We build the GL with cost centers and allocations that make cost-report preparation straightforward. Most agencies pay consultants to rebuild books at cost-report time — we structure the books so that work is already done.
Yes. Multi-county expansion within CA is mostly licensing and EDD registration. Multi-state expansion adds state income tax nexus, state withholding registration, and new SUTA. We handle the registrations and the ongoing filings.
24-36 months ahead is the right window for a home health sale. Buyer due diligence on home health is deep — cost reports, payor contracts, ABC-test compliance, and clinical KPI history all get scrutinized. We help prepare the books, structure, and metrics so the sale gets full value.
An Invitation
A complimentary 30-minute review. We look at your agency specifically — license type, payor mix, geography, growth stage — and tell you honestly what we'd do.
Call directly: 925-320-0309 · ronak@milestonecpas.com
