Mary - although Medicare guidelines for reimbursement is not my expertise (since I'm a physical therapist and not an attorney who interprets Medicare law), I don't think there is anything wrong with hiring new grads for a home health position. I think, however, the preference has always been for physical therapists with some experience. This is likely due to the fact that it's largely unsupervised and you're pretty much on your own.
I would consult a Medicare law attorney to be sure, however.