Personal care and home care: every hour accounted for.

1. What personal care is, and what it is not

Personal care is hands-on help with activities of daily living: bathing, dressing, grooming, toileting, eating, transferring and moving about. Most programs also cover help with instrumental activities of daily living, such as meal preparation, shopping, money management and using the telephone. Homemaker services are the household side of the same need: light housework, laundry, errands and meals, without hands-on care. Companion services are supervision and company: someone present to keep a person safe and engaged.

Federal Medicaid regulation defines personal care services, at 42 CFR 440.167, as services furnished to a person who is not an inpatient or resident of a hospital, nursing facility or similar institution, authorized under a physician’s plan of treatment or, at the state’s option, a state-approved service plan, provided by a qualified individual who is not a legally responsible relative, and furnished in the home or, at the state’s option, another location.

Skilled home health is different in kind. Under Medicare, home health aide services are covered only while the patient needs a qualifying skilled service: intermittent skilled nursing, physical therapy, speech-language pathology, or continuing occupational therapy. Homemaker services alone are not covered, and Medicare excludes custodial care except in hospice. A person who needs help bathing and dressing for years, with no skilled need, is therefore outside Medicare. That person is the personal care agency’s client.

2. Who pays

Private pay. The family or the client pays an hourly rate the agency sets, often with a minimum shift length. The agency invoices from the hours worked. Collection risk is the agency’s.

Long-term care insurance. A policy pays on its own terms: what triggers benefits, how long the waiting period is, the daily or monthly maximum, and what the insurer needs to see. The agency usually bills the client, and the client or agency submits the care plan and timesheets the insurer requires.

Medicaid. The largest public payer for personal care. States cover it as a state plan personal care benefit, or under home and community-based services authorities: section 1915(c) waivers, which nearly every state operates, about 257 programs in all, by Medicaid.gov’s count as read on October 11, 2026; the 1915(i) state plan option; 1915(j) self-directed personal assistance; 1915(k) Community First Choice; and section 1115 demonstrations. A 1915(c) waiver may cover case management, homemaker, home health aide, personal care, adult day health, habilitation and respite, for people who would otherwise need an institutional level of care, provided the waiver costs no more than institutional care. Many states deliver these services through managed care plans, so the agency’s contract, authorization and claim may run through a plan and not the state.

The VA. Through its Homemaker and Home Health Aide program the VA purchases help with daily living for enrolled veterans who meet clinical need and community care eligibility. The aides work for community agencies under contract with the VA, are supervised by a registered nurse, and the amount of care is set with a VA social worker. Copayments depend on the veteran’s service-connected disability status. See VA community care.

3. Licensing varies by state

There is no federal license for non-medical home care. Each state decides whether an agency needs a license, what the category is called, and what it requires: an administrator, policies, caregiver training, supervision, background checks, a survey. Some states license personal care as its own category; some fold it into a home health license; some require only registration; and Medicaid adds its own provider enrollment and contract on top of any license.

Texas is one concrete example. The Texas Health and Human Services Commission licenses Home and Community Support Services Agencies, and an applicant chooses one or more service categories: Personal Assistance Services; Licensed Home Health Services; Licensed and Certified Home Health Services; either home health category with a home dialysis designation; and Hospice. An agency may not offer a service without holding its category. Texas defines personal assistance services as routine ongoing care or services that enable a person in a residence or independent living environment to engage in the activities of daily living or perform functions required for independent living, including respite.

In Texas an applicant completes computer-based pre-survey training and applies through the state’s licensing portal, then requests its initial survey after it begins serving clients, within six months of the license being issued. A Texas Medicaid personal care program such as Primary Home Care requires both an agency license, in the personal assistance or a home health category, and a contract with the Commission. The pattern is general even where the details are not: a license to operate, an enrollment or contract to be paid, and a program’s own rules on top of both.

4. Assessment, authorization and the care plan

For a Medicaid client the state, or the managed care plan, assesses functional need and approves a person-centered service plan. For home and community-based services, federal rules at 42 CFR 441.301 require that the plan be led by the person, record their strengths, preferences, needs, goals and the services and supports chosen, carry the person’s written consent, and be reviewed and revised from a reassessment of functional need at least every 12 months.

The payer then authorizes a quantity of service, expressed in units the program defines, an hour or a fraction of one, over a period such as a week or a month, for a specific service and often a specific provider. The authorization is the agency’s ceiling. Units used beyond it are generally not paid, and units left unused by the end of the period are revenue the agency was entitled to and never earned.

The agency turns the authorization into its own care plan: the tasks the caregiver performs at each visit, on which days, with what precautions. The task list is what the caregiver documents against. Where a state allows aides to perform health-related tasks under a nurse’s delegation, the delegation and the nurse’s supervision of it become part of the plan.

5. Shifts, scheduling and hourly billing

Personal care is scheduled in shifts, not episodes. A typical client has a recurring pattern, two hours each weekday morning or a twelve-hour overnight, and the same caregiver where possible, because continuity is what clients and families notice first. The scheduler’s work is a matching problem refreshed daily: authorized hours, client preferences, caregiver availability, geography, overtime exposure, and call-outs that arrive an hour before a shift.

Billing is hourly or by unit. Private-pay invoices come from hours worked. Medicaid and plan claims come from verified visits, priced at the program’s rate and checked against the authorization. The scheduled shift, the verified visit, the paid hours and the billed units are four records of the same hour, and the agency’s margin is the difference between what it paid for that hour and what it collected.

6. Caregivers: qualifications, training and supervision

Who may work as a personal care aide, and with what training, is set by state licensing and by each payer program. There is no single federal standard for non-medical aides. For comparison, the federal floor for an aide in a Medicare-certified home health agency is at least 75 hours of classroom and supervised practical training, a competency evaluation, and at least 12 hours of in-service training a year, with a registered nurse or other appropriate skilled professional assessing the aide’s services at least every 14 days while skilled care is being given, and a registered nurse visiting on site every 60 days when only aide services are. An agency that runs both lines has two standards for people doing similar work.

Supervision in personal care is usually a supervisor’s periodic visit or call to confirm the care plan is followed and the client’s needs have not changed. Personnel files carry the background checks, training records, competency checks and in-service hours a state or program requires. Because turnover is high, the file has to be complete before the first shift, not after.

7. Electronic Visit Verification

Section 12006 of the 21st Century Cures Act added section 1903(l) to the Social Security Act. Every state must require an electronic visit verification system for Medicaid personal care services and home health care services that require an in-home visit by a provider. The requirement applied to personal care from January 1, 2020 and to home health care services from January 1, 2023. A state that does not comply faces incremental reductions in its federal matching rate, up to one percentage point.

The statute requires the system to verify six things about each visit:

1. the type of service performed;
2. the individual receiving the service;
3. the date of the service;
4. the location of service delivery;
5. the individual providing the service; and
6. the time the service begins and ends.

It applies to personal care under the state plan, 1915(c), 1915(i), 1915(j) and 1915(k) programs and section 1115 demonstrations, and to home health services under the state plan or a waiver, including services bundled under another name and services delivered through managed care. CMS does not apply it to services in congregate residential settings where 24-hour service is available, or to PACE. The law does not require a particular system. CMS has said GPS is not required, that capturing location where the visit starts and ends is sufficient, and that telephone check-in from the home is a common alternative.

States run EVV in different models: a single state-selected vendor, a choice of vendors with a state aggregator, or a provider’s own system meeting state specifications. Texas, for example, requires EVV for personal care services and home health care services, allows approved proprietary systems as an alternative to its EVV vendor systems, provides a visit maintenance process to correct records, and matches claims against EVV data, with compliance reviews by the state and its managed care organizations. To an agency, EVV means a visit not verified, or corrected after the window closes, is a claim that will not pay.

8. Overtime and the Fair Labor Standards Act

The Fair Labor Standards Act exempts from minimum wage and overtime an employee who provides companionship services to a person unable to care for themselves, and exempts from overtime alone a domestic worker who lives in the household. The Department of Labor’s regulations at 29 CFR Part 552, as amended by its 2013 home care rule, define companionship as fellowship and protection, with care limited to 20 percent of hours worked per person per workweek, and bar third-party employers, including home care agencies, from claiming either exemption. Under those regulations an agency caregiver is owed at least the federal minimum wage and overtime at one and one-half times the regular rate for hours over 40 in a workweek.

The Department’s guidance on hours worked matters as much as the rate. Travel from one client to the next during a workday is hours worked; ordinary commuting is not. For shifts of 24 hours or more, up to eight hours of sleep may be excluded by agreement, but interruptions are paid, and if the employee cannot get at least five hours of sleep in total the whole night counts.

On July 2, 2025 the Department proposed rescinding the 2013 rule and returning to its 1975 regulations. On July 25, 2025, in Field Assistance Bulletin 2025-4, it told its investigators to stop enforcing the provisions introduced in 2013 until the effective date of any final rule. As read on October 11, 2026, no final rule had been issued and the regulation still shows the 2013 text. A federal enforcement policy does not change state wage law or the regulation itself, so an agency’s overtime obligations are a question for its own counsel, and its software has to compute overtime under whichever rule applies.

9. Medicaid pass-through and the cost of care

Federal rules adopted in 2024, at 42 CFR 441.302(k), require states to ensure that at least 80 percent of Medicaid payments for homemaker, home health aide and personal care services under 1915(c) waivers go to compensation for direct care workers, beginning July 9, 2030, with state-defined allowances for small providers and hardship. As the regulation reads on October 11, 2026, it makes the split between caregiver pay and everything else a reported number and not a private one.

10. Why the margins are thin

Revenue is an hourly rate fixed by a payer or a local market. Almost all cost is the caregiver’s wage plus payroll taxes, overtime, paid travel between clients, training time and supervision. The difference is small, and it is lost in a handful of predictable ways.