HomeCareAtlas Team · Updated November 2026
Researched from primary state regulatory sources.
How to Start a Home Care Agency in Kentucky
Starting a home care agency in Kentucky costs roughly $30,000 - $60,000 and takes 60-90 Days. Here's every step, fee, and deadline — sourced directly from Kentucky Cabinet for Health and Family Services (CHFS), Office of the Inspector General (OIG), Division of Health Care.
Kentucky calls non-medical home care a Personal Services Agency (PSA). You need a Certification to Operate a PSA from the Office of Inspector General (OIG). Kentucky says "certified," not "licensed." The rules are 906 KAR 1:180 and KRS 216.710-216.716. You mail the application to the OIG with a $500 fee. The PSA rules have no Certificate of Need step. Home health agencies are a different, licensed type with stricter rules. You may not serve clients until you are certified.
To start a non-medical home care agency in Kentucky, you need a Certification to Operate a Personal Services Agency (PSA) from the Kentucky Cabinet for Health and Family Services (CHFS), Office of the Inspector General (OIG), Division of Health Care. The application fee is $500 (psa certification fee ($350 renewal)), the process takes approximately 60-90 days, and total startup costs range from $30,000 - $60,000. You need a $500 Personal Services Agency certification from the OIG. Staff who serve clients with dementia need 6 hours of training, then 3 hours a year. Every worker needs a criminal check, two registry checks, a drug test, and TB screening.
- License Required
- Yes — Certification to Operate a Personal Services Agency (PSA)
- Regulatory Body
- Kentucky Cabinet for Health and Family Services (CHFS), Office of the Inspector General (OIG), Division of Health Care
- Application Fee
- $500 (psa certification fee ($350 renewal))
- Timeline
- 60-90 Days (application to certification)
- Total Startup Cost
- $30,000 - $60,000
- Key Requirement
- You need a $500 Personal Services Agency certification from the OIG. Staff who serve clients with dementia need 6 hours of training, then 3 hours a year. Every worker needs a criminal check, two registry checks, a drug test, and TB screening.
- Last Verified
- November 2026 against Kentucky Cabinet for Health and Family Services (CHFS), Office of the Inspector General (OIG), Division of Health Care regulations
PSA Certification Fee ($350 renewal)
Source: 906 KAR 1:180 §3(2)(a) · Checked Oct 2026
Application to Certification
This is our best guess. Check with the Kentucky Cabinet for Health and Family Services (CHFS), Office of the Inspector General (OIG), Division of Health Care.
Residents Age 70+
Competitive Market
In This Article
Kentucky Licensing Overview
The Kentucky Cabinet for Health and Family Services (CHFS), Office of the Inspector General (OIG), Division of Health Care oversees all non-medical agencies.Kentucky calls non-medical home care a Personal Services Agency (PSA). You need a Certification to Operate a PSA from the Office of Inspector General (OIG). Kentucky says "certified," not "licensed." The rules are 906 KAR 1:180 and KRS 216.710-216.716. You mail the application to the OIG with a $500 fee. The PSA rules have no Certificate of Need step. Home health agencies are a different, licensed type with stricter rules. You may not serve clients until you are certified.
PSA Certification Required
You must get a Certification to Operate a Personal Services Agency from the OIG (906 KAR 1:180). Use the word "certification" when you talk to the state. It renews every year for $350.
Background Checks + Registry Checks
Before work, every manager and caregiver needs a criminal record check (Kentucky court or Justice Cabinet records). They also need a Nurse Aide and Home Health Aide Abuse Registry check and a Caregiver Misconduct Registry check. Add a drug test and a TB risk check by a doctor, APRN, PA, or RN (906 KAR 1:180 §6).
Dementia Care Training Required
Staff who care for clients with dementia need 6 hours of dementia training first. Then they need 3 hours every year (KRS 216.713; 906 KAR 1:180 §7). The Office of Dementia Services must approve your course before you use it. All staff also need training on abuse reporting, medicine help, and talking with clients before they start.
Estimated Startup Costs (2026)
Budget for $30,000 - $60,000 to ensure 3-6 months of runway.
| Category | Low Est. | High Est. |
|---|---|---|
| PSA Certification Application Fee | $500 | $500 |
| Annual Renewal Fee | $350 | $350 |
| Business Formation (LLC with SOS) | $100 | $400 |
| General Liability Insurance | $400 | $2,500 |
| Professional Liability Insurance | $400 | $1,800 |
| Workers' Compensation Insurance | $400 | $1,800 |
| Background Checks + Registry Checks | $400 | $1,200 |
| Substance Abuse Testing (initial staff) | $150 | $500 |
| Office / Administrative Setup | $400 | $2,500 |
| Initial Marketing & Website | $1,200 | $4,500 |
| Working Capital (3-6 months) | $12,000 | $30,000 |
We map every cost and file your Kentucky license for you.
How to Get a Kentucky PSA Certification
1-2 Weeks
Register Your Business
Register your LLC or corporation with the Kentucky Secretary of State. Obtain an EIN from the IRS. Register for state tax accounts with the Kentucky Department of Revenue.
1-2 Weeks
Secure Insurance
Get general liability insurance, professional liability insurance, and workers' comp. Your service agreement must tell clients if you pay workers' comp and if you are bonded (906 KAR 1:180 §8).
2-3 Weeks
Develop Policies and Procedures
Write your service agreement, client rights statement, service plan form, and grievance policy. Write how you will test each worker's skills. Write the manager's daily duties. These go in with your application.
2-3 Weeks
Complete Background Checks and Screenings
Screen the manager and every caregiver before they work. That means a criminal record check, two registry checks, a drug test, and a TB risk check. A worker at higher TB risk also needs a skin or blood test.
1-2 Weeks
Submit PSA Application to OIG
Mail form OIG-1180 to the OIG Division of Health Care in Frankfort. Include the $500 fee, payable to the Kentucky State Treasurer. It is not refunded. Add the manager's duties, a list of staff with their check and training dates, your skills test plan, service agreement, client rights statement, and grievance policy. If you use a "dba" name, add the Secretary of State assumed name paper. Incomplete forms are sent back.
4-6 Weeks (estimate)
OIG Review
The OIG checks your papers against 906 KAR 1:180. If something is missing, it writes to you. You have 10 calendar days to send it. Have 3 or fewer workers and plan to hire more? You can ask for a 90-day provisional certificate.
1-2 Weeks
Receive Certification and Begin Operations
Once the OIG approves your papers, you get your certificate. Make sure each worker is trained and checked before their first client. Renew 60 days before it expires.
We can do all of them for you in Kentucky.
New 2026 Legal Mandates
PSA Certification (906 KAR 1:180; KRS 216.710-216.716)
You need OIG certification under 906 KAR 1:180 to give non-medical personal care. You may not serve clients before you are certified.
Three-Part Registry and Background Screening (906 KAR 1:180 §6)
The manager and every caregiver must pass a criminal record check, a Nurse Aide and Home Health Aide Abuse Registry check, and a Caregiver Misconduct Registry check. Do this before they work. Keep the results for at least 5 years.
Drug Test + TB Screening
Managers and caregivers need a drug test and a TB risk check before work. The TB risk check repeats every year. If risk is found, they need a skin or blood test. A positive test means a chest x-ray before they can work.
Dementia Care Training (Senate Bill 61)
May 11, 2022 - Staff who serve clients with dementia need 6 hours of training first, then 3 hours a year. The Office of Dementia Services must approve your course. This came from Senate Bill 61 (2021). The state can fine agencies that skip it.
Required Staff Training (906 KAR 1:180 §7)
Before serving clients, staff must learn how to report abuse and neglect. They must learn how to help with medicine, if you offer it. They must learn to talk with each client in a way that works. Test each worker on each task before they do it alone.
Guardian/POA Prohibition
Your agency and your workers may not be a client's guardian, conservator, or power of attorney (906 KAR 1:180 §6).
Client Paperwork Deadlines
Give each client a written service agreement. Give them a copy of the service plan within 10 days of starting care. Give 30 days' notice before you raise prices (906 KAR 1:180 §8-9).
Our Kentucky licensing team tracks the law so you do not have to.
Caregiver Mandates
Important Warning
Kentucky checks more than most states. Every worker needs two registry checks and a drug test before any care. Dementia courses must be state-approved. A random online course may not count.
- Three-Part Background Screening: Criminal record check, Nurse Aide and Home Health Aide Abuse Registry check, and Caregiver Misconduct Registry check for all direct care staff.
- Substance Abuse Testing: A drug test for every worker who gives direct care. A positive test for an illegal drug means you cannot hire them.
- TB Screening: A TB risk check before work and every year after. A skin or blood test if the risk check finds risk.
- Dementia Care Training: At least 6 hours of dementia training first, then 3 hours a year. Use a state-approved course. Required for staff who serve clients with dementia.
- Abuse Reporting and Medication Training: Before serving clients, staff must be trained on reporting adult and child abuse or neglect, helping clients self-administer medication, and communication techniques.
- Skills Check and Records: Test each worker on each care task before they do it alone. Write down the date and both signatures. Keep it for 5 years.
Regional Billing Snapshots
*Regional rates vary by specialized care needs (Dementia, Parkinson's) and local competition.*
We launch Kentucky home care agencies start to finish.
Regional Market Opportunities
Kentucky has about 4.6 million people. About 868,000 are 65 or older (Census 2025 estimate). Louisville and Lexington have the most clients. Eastern Kentucky has fewer home care choices. Rates below are our estimates, not official data. Check local prices before you set yours.
Louisville / Jefferson County
Kentucky's largest metro and primary home care market. Strong hospital systems (UofL Health, Norton Healthcare, Baptist Health) create robust referral pipelines. Most competitive market in the state.
Key: Build hospital discharge referral relationships early. Louisville's east-end suburbs have the highest private-pay potential.
Lexington-Fayette
Second-largest city with University of Kentucky healthcare system driving demand. Growing retirement community with moderate competition.
Key: UK HealthCare is the dominant referral source. Horse country suburbs attract affluent retirees.
Bowling Green
Third-largest city and southern Kentucky hub. Growing senior population with less competition than Louisville or Lexington.
Key: Lower operating costs and less competition make this a good launch market for first-time agency owners.
Owensboro / Western Kentucky
River city market with steady demand and limited providers. Owensboro Health is the primary healthcare system.
Key: Smaller market with fewer agencies. Costs are often lower here.
Eastern Kentucky / Appalachia
A rural area with fewer home care choices. Roads and long drives make it hard to serve.
Key: Don't underestimate Appalachian terrain and road conditions. Focus on a tight geographic area. Medicaid is a critical revenue stream in this region.
Cost of care in Kentucky
What agencies charge clients vs. what caregivers earn in Kentucky. The difference is the agency's gross margin per billable hour — before overhead like insurance, admin, marketing, and compliance costs.
$31.5
Avg. hourly rate charged to clients
$18.10
Avg. caregiver hourly wage
$13.40
Gross margin per hour
43%
Gross margin %
What this means for agency owners
In Kentucky, agencies keep roughly $13.40 per billable hour after paying the caregiver. That's a 43% 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.
Kentucky Medicaid Programs
Home and Community Based (HCB) Waiver
Kentucky's main Medicaid waiver for people 65+ or with a physical disability. Services include attendant care, adult day health care, respite, home-delivered meals, and home changes. Medicaid (DMS) and the Department for Aging and Independent Living run it. There is a waiting list.
Participant Directed Services (PDS)
With PDS, waiver members can hire their own workers instead of using an agency. They can also mix both. So some waiver clients will not use an agency at all.
Private-Pay First Strategy
Many new agencies start with private-pay clients. They sign up as Medicaid providers later, once things run well.
Becoming a Provider
Essential 2026 Tech Stack for Owners
Tiles outlined in teal are areas HomeCareAtlas covers in our platform.
Kentucky Licensing FAQ
What do I need to start a home care agency in Kentucky?
You need a Certification to Operate a Personal Services Agency (PSA) from the OIG, Division of Health Care. The fee is $500, then $350 each year. You also need a business, insurance, policies, and screened staff.
How much does a Kentucky home care certification cost?
The PSA fee is $500 the first time, then $350 each year. We estimate total startup costs at $30,000 to $60,000. That includes insurance, staff, and cash to get through the first months.
How long does Kentucky certification take?
Plan on about 60 to 90 days. That is our estimate. The OIG does not post a time. Incomplete or hard-to-read forms are sent back, which adds delay.
What is the difference between certification and licensure in Kentucky?
Non-medical agencies (PSAs) are "certified" by the OIG under KRS 216.710-216.716. Home health agencies give skilled care. They are "licensed" under a different law with stricter rules. The PSA rules have no Certificate of Need step.
What background checks are required in Kentucky?
Each manager and caregiver needs a criminal record check, a Nurse Aide and Home Health Aide Abuse Registry check, and a Caregiver Misconduct Registry check. They also need a drug test and a TB risk check before they work.
Is dementia training required in Kentucky?
Yes, for staff who serve clients with dementia. They need 6 hours first, then 3 hours each year (KRS 216.713). The Office of Dementia Services must approve your course before you start. It says review takes up to 30 days.
Is Kentucky a good market for home care agencies?
It can be. Kentucky has about 868,000 adults 65+ (Census 2025 estimate). The fee is low. Louisville and Lexington have the most clients and big hospital systems.
Can employees serve as a client's guardian or POA in Kentucky?
No. 906 KAR 1:180 says the agency and its workers may not be a client's guardian, conservator, or power of attorney.
Starting in a Nearby State?
Licensing requirements vary a lot between states. Compare your options:
Tennessee
$810 fee · 3-5 months
Ohio
$250 fee · 30-90 Days
Indiana
$250 fee · 60-90 Days
Virginia
$1,500 fee · 10-12 Months
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Home care agencies in Kentucky
Want to see the competition up close? Look at who is already open, city by city.
- Home care agencies in Louisville
- Home care agencies in Lexington
- Home care agencies in Owensboro
- Home care agencies in Florence
- Home care agencies in Thruston
Looking for care for a family member? Find agencies near you
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Where our numbers come from
We check each fact against Kentucky's own rules. Tap a source to read it yourself.
- License needed?Yes906 KAR 1:180 §2(1)· Oct 2026
- Who oversees itKentucky Cabinet for Health and Family Services (CHFS), Office of the Inspector General (OIG), Division of Health Care906 KAR 1:180 §1(1)· Oct 2026
- License nameCertification to Operate a Personal Services Agency (PSA)906 KAR 1:180 §3· Oct 2026
- The rules906 KAR 1:180; KRS 216.710-216.716906 KAR 1:180· Oct 2026
- First license fee$500906 KAR 1:180 §3(2)(a)· Oct 2026
- License lasts1 year906 KAR 1:180 §4(1)(a)· Oct 2026
- BondNone906 KAR 1:180· Oct 2026
- Owner/manager trainingNo state minimum906 KAR 1:180 §6(1)· Oct 2026
- Caregiver trainingNo state minimum906 KAR 1:180 §7· Oct 2026
- Background checksCriminal record check, Nurse Aide/Home Health Aide Abuse Registry and Caregiver Misconduct Registry checks, drug test, and TB screening before work906 KAR 1:180 §6(2)· Oct 2026
- How long it takes60-90 DaysBest guess — not confirmed yet
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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.