HomeCareAtlas Team · Updated March 2026
Researched from primary state regulatory sources.
How to Start a Home Care Agency in Tennessee
Starting a home care agency in Tennessee costs roughly $40,000 - $75,000 and takes 3-5 months. Here's every step, fee, and deadline — sourced directly from Tennessee Health Facilities Commission (HFC) / Department of Health, Office of Health Care Facilities.
Tennessee requires a Home Care Organization license for non-medical home care agencies providing services like homemaking, errands, and personal care. You must apply through the Tennessee Department of Health, Office of Health Care Facilities. A Certificate of Need (CON) may be required before applying for licensure. The process includes a notarized application, policy review, and a survey/inspection from the Regional Office before you can open. Tennessee also has no state income tax, which is a big advantage for agency owners.
To start a non-medical home care agency in Tennessee, you need a Personal Support Services Agency (PSSA) License from the Tennessee Health Facilities Commission (HFC) / Department of Health, Office of Health Care Facilities. The application fee is $1,404 ($1,404 annual license fee), the process takes approximately 3-5 months, and total startup costs range from $40,000 - $75,000. A Certificate of Need may be required, and TBI background checks plus TB tests are mandatory before staff can provide care.
- License Required
- Yes — Personal Support Services Agency (PSSA) License
- Regulatory Body
- Tennessee Health Facilities Commission (HFC) / Department of Health, Office of Health Care Facilities
- Application Fee
- $1,404 ($1,404 annual license fee)
- Timeline
- 3-5 months (typical timeline)
- Total Startup Cost
- $40,000 - $75,000
- Key Requirement
- A Certificate of Need may be required, and TBI background checks plus TB tests are mandatory before staff can provide care.
- Last Verified
- March 2026 against Tennessee Health Facilities Commission (HFC) / Department of Health, Office of Health Care Facilities regulations
$1,404 Annual License Fee
Typical timeline
Residents Age 70+
Moderate Opportunity
How Tennessee compares to neighboring states
| State | License Fee | Timeline | Startup Cost |
|---|---|---|---|
| Tennessee ← | $1,404 | 3-5 months | $40,000 - $75,000 |
| North Carolina | $510 | 8-14 Weeks | $50,000 - $90,000 |
| Georgia | $250 | 8-14 Weeks | $30,000 - $65,000 |
| Kentucky | $500 | 60-90 Days | $30,000 - $60,000 |
| Alabama | $0 (no license) | No timeline | $12,000 - $30,000 |
Tennessee Licensing Overview
The Tennessee Health Facilities Commission (HFC) / Department of Health, Office of Health Care Facilities oversees all non-medical agencies.Tennessee requires a Home Care Organization license for non-medical home care agencies providing services like homemaking, errands, and personal care. You must apply through the Tennessee Department of Health, Office of Health Care Facilities. A Certificate of Need (CON) may be required before applying for licensure. The process includes a notarized application, policy review, and a survey/inspection from the Regional Office before you can open. Tennessee also has no state income tax, which is a big advantage for agency owners.
Home Care Organization License Required
Tennessee requires licensure for all agencies providing non-medical home care services, including basic companion care. Operating without a license is illegal. Apply through the Office of Health Care Facilities with the $1,404 annual fee.
Certificate of Need (CON) May Be Required
You must apply for a CON from the Health Services and Development Agency before applying for licensure, unless your agency strictly serves specific federal programs. Check CON requirements for your specific service type and area.
Administrator Qualifications
You must designate a qualified administrator for your agency. The administrator must meet state requirements for education, experience, and background clearance.
TBI Background Checks
All staff must pass Tennessee Bureau of Investigation (TBI) background checks and TB tests before providing care. This is a mandatory part of the hiring process.
Insurance & Surety Bond
Carry general liability insurance ($1,000,000 per occurrence) and workers' compensation for all employees. A $25,000 surety bond may be required depending on your service type.
Estimated Startup Costs (2026)
Budget for $40,000 - $75,000 to ensure 3-6 months of runway.
| Category | Low Est. | High Est. |
|---|---|---|
| Home Care Organization license fee (annual) | $1,404 | $1,404 |
| Certificate of Need application | $0 | $2,000 |
| Business formation (LLC/Corp) | $300 | $1,500 |
| General liability insurance | $1,500 | $4,000 |
| Workers' comp insurance | $1,500 | $4,000 |
| Surety bond ($25,000) | $250 | $750 |
| TBI background checks & TB tests | $300 | $1,000 |
| Office space & setup | $2,000 | $6,000 |
| Policies & procedures development | $1,500 | $4,000 |
| Technology & software | $1,000 | $3,000 |
| Marketing & branding | $2,000 | $8,000 |
| Working capital (3-6 months) | $15,000 | $35,000 |
Tennessee Home Care Licensing Timeline
1-2 weeks
Define your agency type & register your business
Decide if you are providing non-medical "Home Care Organization" services or medical "Home Health" (requires RN oversight). Register your LLC or corporation with the Tennessee Secretary of State. Get your EIN from the IRS.
2-8 weeks
Apply for Certificate of Need (if required)
Check with the Health Services and Development Agency to see if a CON is needed for your service type and area. If required, submit your CON application. This step can add time to the process.
2-4 weeks
Develop policies, procedures & hire administrator
Create a comprehensive policy manual covering care delivery, hiring, training, emergency protocols, patient rights, infection control, and abuse reporting (TCA 71-6-103). Designate a qualified administrator who meets state requirements.
1-2 weeks
Submit license application & fees
Submit your notarized application to the Tennessee Department of Health, Office of Health Care Facilities, along with the $1,404 annual license fee and all required documentation.
2-4 weeks
Recruit staff & complete background checks
Recruit caregivers and admin staff. All staff must pass TBI background checks and TB tests. Ensure caregivers receive required training before providing care.
4-8 weeks
Request & pass survey/inspection
Request a survey from the Regional Office 30-45 days before your planned opening date. A surveyor will visit to verify compliance with Tennessee regulations. Upon passing, you receive your license to operate.
New 2026 Legal Mandates
Home Care Organization Licensure
Ongoing - Tennessee requires licensure for all agencies providing non-medical home care services. Operating without a license is illegal. Report suspicious unlicensed facilities to the Department of Disability and Aging (DDA).
Abuse Reporting (TCA 71-6-103)
Ongoing - Tennessee law mandates policies on abuse reporting. All agencies must have clear procedures for identifying, documenting, and reporting any suspected abuse, neglect, or exploitation of clients.
TBI Background Checks & TB Tests
Ongoing - All staff must pass Tennessee Bureau of Investigation background checks and tuberculosis tests before providing care. This includes owners, administrators, and all direct care workers.
HIPAA Compliance
Ongoing - All home care agencies must follow federal health information privacy rules. Train staff on HIPAA, set up proper data handling, and have breach notification procedures in place.
Caregiver Mandates
Important Warning
Nashville is booming but highly competitive -- do not underestimate the number of agencies already operating there. Building a strong healthcare referral network early is critical in all Tennessee markets. Start those relationships before you open.
- TBI background checks: All direct care workers must pass Tennessee Bureau of Investigation background checks before starting work.
- TB testing: All staff must pass tuberculosis tests as part of the hiring process.
- Workers' compensation: Required for all employees in Tennessee.
- State-approved training: Caregivers providing personal support services must complete agency-specific training. Home health aides require 75 hours of state-approved training.
- Ongoing education: Provide continuing education on client safety, infection control, abuse prevention, and your agency's policies.
Regional Billing Snapshots
*Regional rates vary by specialized care needs (Dementia, Parkinson's) and local competition.*
Regional Market Opportunities
Tennessee has strong demand across its major metro areas, with no state income tax giving agency owners a financial edge. Nashville is the hottest market but also the most competitive. Knoxville, Chattanooga, and Memphis offer strong demand with less competition.
Nashville
Booming metro with affluent retirees, strong healthcare infrastructure, and rapid population growth. Most competitive market in the state.
Key: High demand but lots of competition. Specialize in a niche (dementia, post-surgical, etc.) or target specific neighborhoods to stand out.
Knoxville
University town with a large senior population and growing healthcare sector. Less competition than Nashville.
Key: Strong referral networks through UT Medical Center and local hospitals. Good balance of demand and competition.
Chattanooga
Growing mid-size metro with steady senior population and lower operating costs than Nashville.
Key: Underserved market with room for new agencies. Build relationships with Erlanger Health System and local senior centers.
Memphis
Large metro with significant Medicaid population and strong healthcare infrastructure. Higher caregiver availability.
Key: Focus on CHOICES Medicaid enrollment for volume. Multilingual care (especially Spanish) is a differentiator.
Rural Tennessee
Significant unmet demand in rural areas across East, Middle, and West Tennessee. Provider shortages create opportunities.
Key: Lower competition but harder to recruit caregivers. Focus on tight geographic clusters and plan for travel time.
Cost of care in Tennessee
What agencies charge clients vs. what caregivers earn in Tennessee. The difference is the agency's gross margin per billable hour — before overhead like insurance, admin, marketing, and compliance costs.
$30.5
Avg. hourly rate charged to clients
$18.04
Avg. caregiver hourly wage
$12.46
Gross margin per hour
41%
Gross margin %
What this means for agency owners
In Tennessee, agencies keep roughly $12.46 per billable hour after paying the caregiver. That's a 41% gross margin.
This is a strong margin that gives you room to cover overhead costs (insurance, admin, marketing, compliance) and still run a profitable agency.
Sources: Avg. hourly rate from CareYaya and CareScout 2025 surveys (averaged). Caregiver wage from Care.com. Gross margin is before overhead costs like insurance, admin, marketing, and compliance.
Tennessee Medicaid Programs
CHOICES (Long-Term Services & Supports)
Tennessee's primary Medicaid waiver program for long-term care. CHOICES provides home and community-based services to seniors and adults with disabilities, helping them stay in their homes.
Agency Angle: Enrolling as a CHOICES provider gives you access to a large pool of Medicaid-funded clients. This is essential for agencies targeting volume, especially in Memphis and rural areas.
TennCare (Managed Care)
Tennessee's Medicaid managed care program. Home care services are delivered through managed care organizations (MCOs) that contract with providers.
Agency Angle: Get credentialed with multiple TennCare MCOs to maximize your referral volume. Each MCO has its own enrollment process and rate structure.
Becoming a Provider
Essential 2026 Tech Stack for Owners
Tennessee Licensing FAQ
Do I need a license to start a home care agency in Tennessee?
Yes. Tennessee requires a Home Care Organization license for all non-medical home care agencies, including basic companion care. Operating without a license is illegal. You apply through the Tennessee Department of Health, Office of Health Care Facilities.
Do I need a Certificate of Need (CON) in Tennessee?
A CON may be required depending on your service type and area. You must check with the Health Services and Development Agency before applying for licensure. If required, the CON process adds time to your startup timeline.
How much does it cost to start a home care agency in Tennessee?
The annual license fee is $1,404. Total startup costs typically range from $40,000 to $75,000, including insurance, surety bond, office setup, training, marketing, and working capital.
How long does licensing take in Tennessee?
The full process takes about 3-5 months. This includes CON application (if required), license application review, staff hiring and background checks, and the on-site survey/inspection. Request your survey 30-45 days before your planned opening.
What insurance is required in Tennessee?
Tennessee requires general liability insurance ($1,000,000 per occurrence) and workers' compensation for all employees. A $25,000 surety bond may also be required depending on your service type.
Is Tennessee a good market for home care agencies?
Tennessee has about 1.2 million adults aged 65 and older (17.0% of the population). The market opportunity rating is 4/5 stars. Nashville is booming with affluent retirees, Knoxville and Chattanooga have less competition, and the state has no income tax -- a big advantage for agency owners.
What are the biggest mistakes new agencies make in Tennessee?
The two most common mistakes are underestimating Nashville market competition (there are many established agencies) and not building a healthcare referral network early enough. Start building relationships with hospitals, discharge planners, and senior centers before you even open.
Starting in a Nearby State?
Licensing requirements vary a lot between states. Compare your options:
North Carolina
$510 fee · 8-14 Weeks
Georgia
$250 fee · 8-14 Weeks
Kentucky
$500 fee · 60-90 Days
Alabama
No state license required · N/A
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This guide is for informational purposes only and does not constitute legal, regulatory, or business advice. Licensing requirements, fees, and regulations change frequently. Always verify current requirements with your state's licensing agency before making business decisions. HomeCareAtlas is not responsible for the accuracy or completeness of this information.
Researched and reviewed by
John Helmy, Founder of HomeCareAtlasBuilding tools and resources to help home care agency owners navigate licensing, compliance, and growth.