A healthcare agency is an organization that provides, coordinates, or arranges health-related services, typically outside of a traditional hospital or clinic setting. The term most commonly refers to home health agencies, which deliver skilled nursing and therapy services to patients in their homes, but it also encompasses government public health agencies, staffing agencies, and referral organizations. What distinguishes an agency from a facility like a hospital is that agencies generally bring services to people or connect them with care, rather than housing patients in a brick-and-mortar location.
How Agencies Differ From Facilities
The distinction matters because the two operate under different rules, serve different purposes, and show up differently in your life. A healthcare facility, such as a general acute care hospital, is a physical location that provides round-the-clock inpatient care with on-site medical staff, surgical capability, laboratories, and pharmacies. You go to the facility.
A healthcare agency works differently. Under California’s Health and Safety Code, for example, a home health agency is defined as a public or private organization that provides or arranges for skilled nursing services to people in their temporary or permanent place of residence. The care comes to you. Some agencies don’t deliver care directly at all. A referral agency, for instance, screens patients, provides facility information, and connects people with the right nursing home or long-term care setting for a fee.
This organizational difference shapes everything from how the agency is licensed to how it bills insurance to what kind of oversight it receives. Hospitals and agencies both fall under federal certification requirements, but the specific rules they follow are entirely separate.
Home Health Agencies
When most people search for “healthcare agency,” they’re encountering home health agencies. These are the most common type, and the industry is enormous. The U.S. home healthcare market was valued at roughly $162 billion in 2024 and is projected to more than double to $381 billion by 2033, growing at about 10% per year. That growth reflects an aging population and a strong preference among patients for recovering at home rather than in a facility.
A home health agency can be publicly run (operated by a state or county government), nonprofit (like a visiting nurse association supported partly by charitable donations), or proprietary (a private, for-profit company). All three types provide the same core categories of service. The federal government defines a home health agency as an organization primarily engaged in providing skilled nursing and therapeutic services, governed by policies set by a professional group that includes at least one physician and one registered nurse, and supervised by a physician or registered nurse.
Services They Provide
The services covered by Medicare give a good picture of what home health agencies typically offer. Skilled nursing care includes wound care for surgical wounds or pressure sores, IV therapy, nutrition therapy, injections, patient and caregiver education, and monitoring of serious or unstable health conditions. Therapy services cover physical therapy, occupational therapy, and speech-language pathology.
Home health aide services handle more personal tasks: help with walking, bathing, grooming, changing bed linens, and feeding. There’s an important catch, though. Medicare only covers aide services when you’re also receiving skilled nursing or therapy. If personal care like bathing and dressing is the only help you need, that falls into “custodial care,” which Medicare does not pay for. Many families discover this distinction the hard way, so it’s worth understanding before you start arranging services.
How They Get Paid
Home health agencies that participate in Medicare are reimbursed through the Home Health Prospective Payment System. Rather than billing for each individual service, agencies receive a predetermined payment for a defined period of care, adjusted based on the patient’s condition and needs. This model, called the Patient-Driven Groupings Model, bases payment on the clinical characteristics that actually drive the cost of treating each patient. For 2025, CMS estimated that total Medicare payments to home health agencies would increase by about 0.5%, or $85 million, compared to 2024. Agencies also bill Medicaid and private insurance, each with their own payment structures.
Government Public Health Agencies
The term “healthcare agency” also applies to government organizations that protect and promote public health. The largest umbrella is the U.S. Department of Health and Human Services (HHS), which operates 10 regional offices across the country and oversees programs that provide millions of children, families, and seniors with access to healthcare, food safety oversight, and disease prevention.
Several well-known agencies operate under HHS. The Centers for Disease Control and Prevention (CDC), headquartered in Atlanta, works around the clock on disease surveillance, outbreak response, and prevention of both chronic and infectious diseases. The Agency for Toxic Substances and Disease Registry (ATSDR) focuses on environmental health threats, responding to emergencies involving hazardous substances and studying the health effects of contaminated sites. The Office of the Surgeon General oversees key public health offices, advisory committees, and 10 regional health offices.
These agencies don’t treat individual patients the way a home health agency does. Their role is population-level: tracking disease, setting safety standards, funding research, and coordinating responses to health crises.
Staffing and Referral Agencies
A third category covers organizations that don’t deliver care themselves but connect healthcare workers with facilities or connect patients with providers. Healthcare staffing agencies recruit nurses, therapists, and other professionals, then place them in hospitals, clinics, or home health settings on temporary or permanent assignments. Referral agencies perform a screening and matching function, evaluating a patient’s needs and directing them to the appropriate facility or care setting. These agencies earn fees for their placement or referral services rather than billing for clinical care.
Licensing, Certification, and Quality Ratings
Any healthcare agency that wants to participate in Medicare must meet federal certification requirements. For home health agencies, these are spelled out in the Conditions of Participation published in the Code of Federal Regulations. Agencies must also be licensed under their state’s laws, maintain clinical records on all patients, operate under an institutional plan and budget, and meet health and safety standards.
Beyond the mandatory requirements, agencies can pursue voluntary accreditation. The Joint Commission, a private nonprofit founded in 1951, evaluates healthcare organizations against standards focused on actual performance and quality outcomes. Accreditation signals that an agency has met standards above the regulatory minimum.
For home health agencies specifically, CMS publishes two separate star ratings that consumers can check before choosing a provider. One is a quality of care star, built from six outcome measures and three process measures. The other is a patient experience star, drawn from standardized patient surveys. The ratings use different scales (the quality star uses half-star intervals, while the patient experience star uses whole numbers), and there is no single combined score. Research has shown that patients, especially older adults, have difficulty interpreting multiple quality scores at once and tend to respond better to a single summary rating. If you’re comparing agencies, looking at both star ratings together gives you the most complete picture, even though it takes a bit more effort to parse.
How to Tell What Type of Agency You Need
If you or a family member has been discharged from the hospital and needs skilled nursing, wound care, or physical therapy at home, you’re looking for a home health agency. Your doctor typically initiates the referral, and you can compare agencies in your area using Medicare’s Care Compare tool online, which displays both star ratings.
If you need help only with daily activities like bathing, cooking, or getting dressed, and you don’t require any medical care, you’re looking for a personal care or custodial care agency. These agencies operate outside the Medicare home health benefit, so you’ll likely pay out of pocket or through long-term care insurance.
If you’re a nurse or therapist looking for work placements, a healthcare staffing agency handles that matchmaking. And if you’re trying to find the right nursing home or long-term care facility for a family member, a referral agency can help screen options based on the patient’s specific medical and personal needs.