If you're starting or operating a hospice agency in Pennsylvania, you're entering a field that's heavily regulated and requires careful attention to insurance requirements. Here's the thing that catches most new hospice owners off guard: Pennsylvania has layers of requirements—state licensure, federal Medicare certification, and insurance mandates that kick in from your very first employee. Understanding what coverage you need isn't just about checking boxes. It's about protecting your business, your staff, and the vulnerable patients you serve.
Let's walk through exactly what Pennsylvania requires, what the industry expects, and how to make sure you're properly covered without overpaying for protection you don't need.
Pennsylvania Hospice Licensing Requirements
Pennsylvania law is clear: you cannot operate a hospice agency without a license from the Department of Health. Since 1999, when Senate Bill 996-97 amended the state's Health Care Facilities Act, hospices have been classified as health care facilities requiring licensure. This isn't optional—no license means you can't legally operate.
State licensure is also a requirement for federal Medicare certification. You can't get Medicare certified without your Pennsylvania license first. The Department of Health enforces minimum health and safety standards through unannounced surveys, and they use federal Medicare Conditions of Participation (42 CFR Part 418) as interim guidelines until Pennsylvania finalizes its own regulations.
To apply for licensure, you'll need to submit CMS Forms 417, 690, and 1561 to the Division of Home Health. If you're planning any facility construction or modifications, architectural plans must be submitted to the Division of Safety Inspection for approval before you break ground. Think of licensure as your foundation—everything else builds on this.
Workers' Compensation Insurance: Mandatory from Day One
Pennsylvania's workers' compensation law is straightforward: coverage is required from the first day of employment for virtually all employees. Whether you're hiring full-time nurses, part-time aides, or seasonal administrative staff, they're covered from day one. There's no waiting period, no minimum number of employees, and no threshold to cross.
The only exemptions are narrow: casual workers whose employment isn't in your regular course of business, agricultural workers who meet specific criteria, workers with religious exemptions, corporate executives, and sole proprietors. If you're running a hospice agency with nurses, aides, social workers, or administrative staff, these exemptions don't apply to you.
You must purchase workers' compensation insurance from an authorized carrier or self-insure if you meet the requirements. The Pennsylvania Department of Labor and Industry administers the program and updates fee schedules annually. For 2025 and 2026, healthcare services have specific fee schedules that govern how much providers are reimbursed for treating injured workers. You're also required to post a notice in an easily accessible location with your insurer's contact information so employees know how to file claims.
Why does this matter so much for hospices? Your staff faces real risks—lifting patients, exposure to infectious diseases, transportation between homes, and the emotional toll of end-of-life care. Workers' comp protects them when injuries happen and protects you from direct lawsuits over workplace injuries.
Professional and General Liability Insurance
Here's where things get less clear-cut. Pennsylvania doesn't have a specific state law mandating minimum general liability or professional liability insurance amounts for hospice facilities. But before you celebrate, understand this: just because the state doesn't require specific limits doesn't mean you can operate without coverage.
Industry standards have coalesced around $1 million per occurrence and $3 million aggregate for both professional liability and general liability coverage. These limits aren't arbitrary—they reflect what Medicare, Medicaid, and most private payers expect to see in your contracts. If you want to participate in Medicare, you'll need to demonstrate adequate insurance as part of your certification process.
Professional liability insurance (sometimes called malpractice insurance) covers claims arising from clinical care—medication errors, misdiagnosis, failure to properly assess pain, or delayed interventions. General liability insurance covers non-clinical risks like slip-and-fall accidents at your office, property damage, or injuries that occur during home visits unrelated to care delivery.
Most hospice insurance packages bundle these coverages with abuse and molestation coverage, which addresses the unfortunate reality that vulnerable patients can face exploitation. While this coverage adds cost, it's become standard practice in the hospice industry and many contracts explicitly require it.
Medicare Certification and Required Contracts
If you plan to bill Medicare or Pennsylvania's Medical Assistance (Medicaid) program, you must maintain Medicare certification and comply with federal Conditions of Participation. Pennsylvania's Department of Health contracts with CMS to conduct surveys verifying compliance, and these surveys happen without warning.
Part of Medicare certification involves maintaining specific contracts that must be current and signed at the time of survey. You need a contract with a Medicare-certified durable medical equipment provider, even if you rarely use DME. You also need a contract with a Medicare-certified skilled nursing facility for respite care or facility-based support when symptoms become unmanageable at home. And you need pharmacy contracts that spell out timelines, access protocols, and after-hours support.
These contracts often include insurance requirements. SNFs and DME providers may require you to carry specific liability limits and name them as additional insureds. Your pharmacy contract might require errors and omissions coverage. Read your contracts carefully—the insurance requirements buried in vendor agreements can be just as binding as state law.
Other Insurance Considerations for Pennsylvania Hospices
Beyond the core requirements, several other insurance types merit consideration. Commercial auto insurance is essential if you own vehicles or if employees use personal vehicles for work. A non-owned auto liability endorsement protects you when staff members drive their own cars to patient homes.
Cyber liability insurance has become increasingly important as hospices handle electronic health records and billing data. A data breach involving patient information can trigger HIPAA violations, regulatory fines, and notification costs that run into six figures. Directors and officers insurance protects your leadership team from personal liability for management decisions. And if you handle biohazardous waste, you may need specialized coverage for disposal operations.
Some hospices obtain a CLIA waiver if they provide services involving glucose monitoring. This triggers additional compliance requirements and may affect your insurance needs. Review your service offerings with your insurance agent to identify any gaps in coverage.
How to Get Started
Start by contacting the Pennsylvania Department of Health Division of Home Health to begin your licensure application. While that process moves forward, connect with an insurance broker who specializes in hospice coverage. Generic commercial insurance agents often don't understand the nuances of hospice operations, and you'll end up either underinsured or paying for coverage you don't need.
Get quotes for a comprehensive package that includes workers' compensation, professional liability, general liability, and abuse/molestation coverage. Ask specifically about claims-made versus occurrence policies for professional liability—this distinction affects how long you're covered after you stop operating. Review your employee handbook and hiring practices with your workers' comp carrier, as safety programs and training can reduce your premiums.
Finally, document everything. Keep copies of all insurance policies, certificates of insurance, and renewal notices. When Medicare surveyors arrive, they'll want to verify your coverage is current and adequate. Letting a policy lapse can jeopardize your licensure, your Medicare certification, and your ability to operate.
Pennsylvania's hospice insurance requirements create a framework designed to protect patients, employees, and business owners. While navigating these requirements takes effort, getting your coverage right from the start prevents costly mistakes down the road. Work with experienced professionals, ask questions, and build insurance protection that lets you focus on what matters most—providing compassionate end-of-life care.
