Navigating the home health and hospice industry can be overwhelming. From regulatory bodies to accreditation organizations, there is a seemingly endless list of rules, requirements, and acronyms: CMS, NGS, CDPH, ACHC, CHAP, TJC. Who are these entities, and what role do they play in ensuring your agency remains compliant and successful?
At The Home Health Consultant, we specialize in helping agencies like yours navigate this complex landscape. We have years of experience in regulatory compliance, accreditation, and operational excellence. This makes us more than knowledgeable in the industry and how it works.
In this article, we’ll provide a breakdown of the home health and hospice industry’s regulatory structure, particularly for agencies enrolled in Medicare. By the end, you’ll have a clear understanding of the major governing bodies in the industry and how they impact your agency’s operations.
What is CMS & Why Does It Matter to Your Agency?
The Centers for Medicare & Medicaid Services (CMS) defines the baseline standards, known as the Conditions of Participation (CoPs). Every agency must meet CoPs to participate in Medicare and deliver high-quality care. For any home health or hospice agency, understanding CMS’s role isn’t optional—it’s essential for compliance, funding, and long-term success.
The History of CMS
The Centers for Medicare and Medicaid Services (CMS) was established in 1965 as part of the U.S. Department of Health and Human Services (HHS). Its goal is to administer Medicare and Medicaid nationwide. Medicare and Medicaid were created under President Lyndon B. Johnson's Great Society program in 1965.
CMS was originally called the Health Care Financing Administration (HCFA). HCFA aimed to provide health insurance for Americans aged 65 and older (Medicare) and low-income individuals and families (Medicaid).
In 2001, the agency was renamed CMS, and over the years, its role has expanded to encompass additional programs such as the Children’s Health Insurance Program (CHIP) and the Health Insurance Marketplace under the Affordable Care Act (ACA) of 2010.
With over 100 million Americans under its care, CMS is a cornerstone of the U.S. healthcare system, committed to enhancing access, quality, and equity in care delivery.
CMS’s Responsibilities in Home Health & Hospice
Think of CMS as the regulatory and financial hub that anchors the entire home health and hospice industry. Its Conditions of Participation (CoPs) outline HR, administrative, and patient care standards that every agency must follow. Non-compliance isn’t just risky—it can result in penalties, jeopardize Medicare certification, or even agency closure.
Beyond regulations, CMS acts as a financial gatekeeper. It designs the reimbursement structures for Medicare-funded services, ensuring agencies meet quality benchmarks before receiving payments. This dual role makes CMS not only a rule-maker but also a critical partner in sustaining the financial health of home health and hospice providers.
What is a Medicare Administrative Contractor?
Medicare Administrative Contractors (MACs) are private organizations contracted by CMS to handle administrative tasks for Medicare. These tasks include:
-enrolling new providers
-processing claims,
-enforcing Medicare regulations,
- and providing support to providers, including home health and hospice agencies.
MACs serve as intermediaries between CMS and healthcare providers. They make sure national regulations are implemented effectively at the regional level.
The MAC structure has evolved over time to streamline Medicare administration and create a more efficient system. Each MAC is assigned specific states and territories, providing localized support to agencies in their region.
What is National Government Services (NGS)?
National Government Services (NGS) is a MAC tasked with processing Medicare claims for home health and hospice providers across several states. If your agency operates in states like California, New York, or Wisconsin, chances are you’re working closely with NGS.
The states NGS serves include:
- Alaska
- Arizona
- California
- Connecticut
- Hawaii
- Idaho
- Maine
- Massachusetts
- Michigan
- Minnesota
- Nevada
- New Hampshire
- New Jersey
- New York
- Oregon
- Rhode Island
- Vermont
- Washington
- Wisconsin
Understanding the role and responsibilities of your designated MAC is essential for ensuring compliance, efficient claims processing, and smooth communication with Medicare.
The History of NGS
NGS has been a cornerstone of Medicare claims management for decades, evolving alongside CMS’s regulatory landscape. Established as a Medicare Administrative Contractor, NGS specializes in ensuring healthcare providers meet federal standards for claims accuracy and compliance.
Its expertise in processing applications and paperwork ensures smoother administrative operations, allowing agencies to focus on patient care instead of bureaucratic hurdles.
NGS Responsibilities
NGS acts as one major branch of the CMS tree. It ensures that federal standards are upheld within its designed region, while streamlining administrative processes. The main responsibilities of NGS are:
- Application Processing: Processing enrollment and change applications into the Medicare system.
- Claims Processing: Ensuring accurate billing practices and efficient Medicare payments.
- Audits and Appeals: Conducting compliance audits and managing payment disputes.
You can consider NGS as a smaller and more localized branch of CMS. It was established to assist CMS in processing applications and paperwork more efficiently based on the region your agency is located. NGS helps streamline your agency's interactions with CMS.
What is CDPH?
The California Department of Public Health (CDPH) serves as California’s state-level regulatory body for home health and hospice agencies. While federal CMS standards set the baseline for operations, CDPH adds an additional layer of oversight through state-specific requirements. This dual framework ensures that agencies provide safe, high-quality care while meeting California's public health priorities.
The History of CDPH
The California Department of Public Health (CDPH) has roots that date back to the early 20th century. Its functions and responsibilities can be traced back to early government public health efforts in California and the United States.
California's public health efforts began with the creation of the State Board of Health in 1870. This board was one of the first state-level public health authorities in the U.S. It was created to combat epidemics like smallpox and cholera. This was long before the creation of Medicare.
In the mid-20th century, public health responsibilities expanded dramatically due to:
- Advances in medical science, such as vaccines.
- Growing public health challenges like tuberculosis, polio, and environmental health concerns.
- Federal legislation like the establishment of Medicare and Medicaid in the 1960s, which required states to align with federal health regulations.
The Department of Health Services (DHS) was created in 1973 by merging several health-related programs to centralize operations. By 2007, CDPH was formally established as a standalone department.
CDPH Responsibilities
CDPH’s main responsibility is to ensure all CMS CoPs are being met in addition to their own state level standards. The state level standards are often based off of CoPs, but can vary slightly depending on your state. CDPH’s responsibilities are particularly rigorous in California, a state known for its extensive regulatory processes.
Relating to the HH and HSP industry, CDPH is responsible for:
- licensing home health and hospice agencies
- application processing of all state health programs
- *occasionally conducting inspections and surveys (investigating complaints)
- enforcing state laws that promote patient safety.
Agencies must secure CDPH application approval and pass their licensure survey to operate legally in California. This involves meeting specific staffing and operational standards that can overlap with CMS’s federal CoPs.
CDPH’s oversight can feel challenging, but it’s an essential safeguard to maintaining high-quality care in one of the most regulated states in the U.S. Understanding how CDPH’s requirements complement CMS guidelines is critical for agencies aiming to operate legally and effectively in California.
What are the National Accreditors?
National accrediting organizations such as
- the Accreditation Commission for Health Care (ACHC)
- Community Health Accreditation Partner (CHAP)
- and The Joint Commission (TJC)
provide additional certification and survey options for agencies.
While not mandatory for Medicare participation, accreditation offers significant benefits, including faster survey timelines, enhanced credibility, and recognition for exceeding national standards.
Responsibilities of Accreditors
Accreditors make up a smaller, but still significant branch of the CMS tree. These national accrediting bodies conduct thorough evaluations of agencies’ operational, clinical, and administrative practices. Agencies that achieve accreditation are recognized as providing high-quality care that meets or exceeds national standards.
Accreditors conduct surveys. They evaluate clinical and administrative practices to ensure agencies meet all CMS CoPs, in addition to state and accreditor-specific standards. The types of surveys accreditors can conduct include:
- Licensure: the survey an agency must undergo to receive their license from the state. This is only applicable to certain states.
- Deemed Status Medicare Accreditation: the survey an agency must pass to earn accreditation and the ability to bill Medicare.
- Renewals: after passing their initial Medicare accreditation, agencies must pass a renewal survey every three years to continue billing Medicare.
- Focus: a survey in response to a change of ownership or location. These are both reportable changes that may require accreditor validation.
Why Accreditors Exist
You may be thinking to yourself, if my state health department conducts my surveys, why do we need national accreditors? The answer is actually quite simple. As the US population grew, so did the number of people needing healthcare. The national accreditors are contracted by CMS to assist with speeding up survey timelines and ensuring a more thorough and consistent system of checks and balances is carried out.
Although accreditors do many of the same things CDPH is able to do, they have different processes. For example, accreditor surveyors are trained differently than CDPH surveyors and even other accrediting bodies. Each accreditor has their own set of standards they check for in surveys, in addition to your state standards and CoPs.
What are Recovery Audit Contractors (RACs)?
Recovery Audit Contractors (RACs) help ensure Medicare payments are accurate. They identify overpayments and underpayments made to healthcare providers, including home health and hospice agencies. The program began on January 1, 2010, to combat fraud, waste, and abuse in Medicare.
The Responsibilities of RACs
RACs review claims to find errors. Overpayments can happen if claims are submitted for unnecessary services or if coding errors occur. Underpayments happen when providers bill for simpler services than were actually provided. RACs examine medical records to find these issues.
They look for:
- Claims for services that don’t meet Medicare’s medical necessity rules.
- Coding mistakes that don’t match the services provided.
- Missing or incomplete documentation.
- Duplicate claims that result in double payments.
- Payments made using outdated rates or by the wrong payer.
Why Do RAC Audits Matter for Home Health and Hospice Agencies?
Medicare-certified home health and hospice agencies must follow strict billing and documentation rules. RAC audits ensure claims are accurate. Agencies that don’t comply may have to repay overpayments or risk claim denials. RACs also help recover improper payments and encourage providers to maintain accurate records.
How Do These Governing Bodies Interact with Each Other and My California Agency?
CMS, NGS, CDPH, and the national accrediting bodies each have a distinct role within the home health and hospice regulatory landscape, but they work together to form a cohesive structure that ensures quality, safety, and compliance. Here’s how they interact:
- CMS establishes the federal standards that all agencies must meet, overseeing the overall Medicare program.
- NGS acts as CMS’s partner in processing Medicare enrollments, claims and ensuring agencies adhere to federal billing standards.
- CDPH enforces California’s state-specific requirements as well as Medicare CoPs, adding an additional regulatory layer for agencies in California.
- Accrediting organizations assess agencies’ compliance with high-quality standards, offering a mark of distinction.
- RACs ensure Medicare program integrity by reviewing claims to identify overpayments and underpayments to healthcare providers
For home health and hospice agencies, understanding how each of these organizations operates can streamline enrollments, improve regulatory compliance and help avoid fines, sanctions, and other penalties.
Why Is Understanding the HH & HSP Industry Structure Crucial?
Navigating home health and hospice regulations can feel overwhelming, but understanding the roles of CMS, NGS, CDPH, and accrediting bodies simplifies the process. By identifying who to approach—and who to avoid—for compliance guidance, your agency can focus on staying aligned with regulatory expectations.
For instance, contacting CMS with questions about compliance isn’t advised, as their role is enforcement rather than education. Accrediting bodies, in contrast, often provide educational resources and may welcome your inquiries, depending on their focus.
For more in-depth, personalized guidance, consultants remain the best resource. They are invested in your success and provide clarity without using your concerns against you.
To help you get started, download our comprehensive infographics on the regulatory structure. This resource is designed to clarify the framework and equip your agency to thrive in a complex regulatory environment. Click below to access it now and take a confident step toward better compliance management.
*This article was written in consultation with Mariam Treystman.
