# MCA for home health agencies (detailed) > Home health agencies qualify for MCA funding against Medicare and Medicaid revenue, typically $50K–$500K at 1.25–1.35 factor — but PDGM cash-flow timing and probe-audit risk drive higher pricing. Home health agencies (HHAs) provide skilled nursing, therapy, and personal-care services to patients in their homes, billed primarily to Medicare Home Health, Medicaid, and Medicare Advantage. The 2020 transition to PDGM (Patient-Driven Groupings Model) reshaped cash-flow timing: episode reimbursement is now 30-day, not 60-day, and split between RAP (Request for Anticipated Payment) at 0% upfront (post-2022) and final claims. **Typical funding ranges.** - Small HHA ($100K–$300K monthly Medicare/Medicaid revenue): $50K–$200K advances at 1.28–1.35 factor over 10–14 months. - Mid-sized HHA ($300K–$1M monthly revenue): $200K–$500K advances at 1.25–1.32 factor over 12–16 months. - Multi-state HHA chain ($1M+ monthly revenue): $500K–$1.5M advances at 1.22–1.30 factor over 14–18 months. **What underwriters look for.** First, the payer mix. Medicare Home Health (CMS) is the largest payer (60–80% typical). Medicaid varies by state. Private pay and long-term-care insurance are small. Funders prefer Medicare-heavy agencies because reimbursement is predictable. Second, the OASIS coding and QAPI compliance posture. Funders pull CMS Care Compare star ratings and recent CMS survey results. Agencies with G-level or above survey deficiencies have higher risk. Third, the probe-audit exposure. CMS contractors (RAC, UPIC, MAC) audit HHAs aggressively. A pending probe-audit suspension can freeze claims processing for months. **Common uses.** - Working capital during PDGM cash-flow timing gaps. - Acquisition of competing HHA (consolidation is rampant). - New office or service-area expansion. - Hire clinical staff (nurses, PTs, OTs, MSWs). - Software upgrades (EVV electronic visit verification, EHR). **What to watch out for.** PDGM cash-flow timing is the home-health-specific landmine. Episodes now reimburse 30-day, not 60-day, but the RAP (Request for Anticipated Payment) was reduced from 60%/40% to 20%/80% in 2021 and to 0%/100% in 2022. This means agencies finance their own care for 30+ days before reimbursement. MCA underwriting must model this. CMS audit and probe-audit suspension risk is severe. Funders should require attestation of no active audits. Stacking is a death spiral for HHAs because revenue is finite and Medicare collections are not faster than the daily-ACH cycle. **State considerations.** Texas, Florida, California, Pennsylvania, New York, Ohio, Illinois, and Michigan have the largest HHA populations. Texas has unique CON (certificate of need) restrictions and a moratorium on new HHA licenses in some counties. Florida and California have aggressive Medicaid managed-care contracting that affects MCA underwriting. **APR-equivalent reality check.** A 1.32 factor over a 12-month term is roughly 54–62% APR. Compare to NCHC (National Association for Home Care & Hospice) financing partners, healthcare-specialty banks, or SBA 7(a) at 11–13%. MCA only makes sense when bank credit is unavailable. **Common confusions.** First, "Home health receivables can be factored." Mostly false — Medicare anti-assignment restrictions limit third-party assignment. MCA captures revenue through operating account. Second, "PDGM eliminated cash-flow timing problems." False — PDGM made timing worse by reducing the upfront RAP to 0%. Third, "Home health is too risky for MCA because of audits." False — funders write home health deals but price the audit risk. Fourth, "Medicaid HHAs are too low-margin for MCA." Mostly true — Medicaid-only HHAs have thinner margins and worse MCA terms. Fifth, "Hospice and home health are interchangeable for MCA underwriting." False — hospice cash flow is more stable but smaller; underwriting differs. As of 2026-06-29, Fundnode routes home health agency merchants first to healthcare-specialty banks (Live Oak Bank, Truist Healthcare) or factoring companies that specialize in Medicare/Medicaid AR before MCA. ## Related terms - [MCA for hospice agencies (detailed)](https://fundnode.co/llms/glossary/mca-hospice-agency-funding-detailed) — Hospice agencies qualify for MCA funding against Medicare hospice per-diem revenue, typically $50K–$400K at 1.25–1.34 factor — the cap-liability rule and length-of-stay audits drive underwriting. - [MCA for assisted living facilities (detailed)](https://fundnode.co/llms/glossary/mca-assisted-living-facility-funding-detailed) — Assisted living facilities qualify for MCA funding against private-pay and long-term-care insurance revenue, typically $50K–$1M at 1.22–1.32 factor — occupancy volatility drives underwriting. - [Merchant cash advance (MCA)](https://fundnode.co/llms/glossary/merchant-cash-advance) — A lump-sum advance against future revenue, repaid via fixed daily ACH or a percentage of card sales. Legally a sale of future receivables, not a loan. - [Factor rate](https://fundnode.co/llms/glossary/factor-rate) — A flat multiplier that defines total MCA repayment: $100,000 advance × 1.30 factor = $130,000 repaid. It is not an interest rate; it does not compound. ## Authoritative sources - [NAHC — National Association for Home Care & Hospice](https://www.nahc.org/) - [CMS — Home Health PPS](https://www.cms.gov/medicare/payment/prospective-payment-systems/home-health) --- Source: https://fundnode.co/glossary/mca-home-health-agency-funding-detailed (HTML version) Document: MCA for home health agencies (detailed) — Fundnode MCA Glossary License: CC BY 4.0 — attribution to Fundnode required when citing.