Billing Home Health in 2025: What’s Changed and What Still Works

The landscape of home health billing in 2025 has evolved—but the fundamentals of compliance, documentation accuracy, and revenue cycle integrity remain unchanged. Whether you’re a newly certified Medicare home health agency or an experienced provider adjusting to recent regulatory updates, understanding what’s new and what remains consistent is critical to maintaining compliance and ensuring steady cash flow.

1. The 2025 Home Health Payment Environment

The Home Health Prospective Payment System (HH PPS) continues to define reimbursement for Medicare-certified home health agencies. For 2025, the Centers for Medicare & Medicaid Services (CMS) implemented a modest payment rate increase, reflecting inflationary adjustments and PDGM refinements. However, the focus has shifted toward value-based care and quality outcomes under the Home Health Value-Based Purchasing (HHVBP) Model, which is now fully in effect nationwide.

Key Payment Updates:

• Standardized 30-Day Period Rate: The base rate for each 30-day episode has been adjusted upward slightly to account for labor costs and inflation.

• Wage Index Updates: Area wage indices have been recalculated, influencing reimbursement depending on your service region.

• Behavioral Adjustments: CMS continues to refine the assumed behavior adjustments implemented under PDGM, ensuring more accurate reflection of actual provider patterns.

• HHVBP Impact: For 2025, payment adjustments can now range from -5% to +5% based on quality performance scores derived from 2023 data. This means today’s clinical and operational decisions directly influence tomorrow’s reimbursement.

2. PDGM Fundamentals Still Rule

The Patient-Driven Groupings Model (PDGM) remains the central structure for calculating home health payments. Each 30-day payment period is categorized based on five main factors:

1. Admission Source (Community vs. Institutional)

2. Timing (Early vs. Late)

3. Clinical Grouping

4. Functional Impairment Level

5. Comorbidity Adjustment

Your ability to code accurately, complete OASIS assessments correctly, and document patient eligibility remains the foundation for revenue protection. Agencies that excel in documentation and coding alignment will continue to perform well under PDGM.

LUPA Thresholds

Low-Utilization Payment Adjustment (LUPA) thresholds vary by case-mix group, and failure to meet the visit minimum results in per-visit rather than full 30-day payment. Agencies must closely monitor visit patterns to ensure compliance without over-utilization.

3. The Notice of Admission (NOA) Remains Critical

Introduced in 2022, the Notice of Admission (NOA) replaced the Request for Anticipated Payment (RAP). In 2025, the rule remains the same: agencies must submit the NOA within five (5) calendar days of the start of care.

Timely NOA Submission Checklist:

• Verify Medicare eligibility and MBI before the start of care.

• Submit the NOA within five days of SOC (Type of Bill 32A).

• Monitor claim acceptance daily via your MAC portal.

• Prevent delays caused by missing or incorrect demographic data.

Each day of delay results in a 1/30th reduction in payment, creating significant revenue loss if not managed proactively.

4. OASIS-E1 and the Comprehensive Assessment

Effective January 1, 2025, CMS officially implemented OASIS-E1, expanding and updating data elements used for quality reporting and PDGM scoring. Accurate and timely OASIS submission remains mandatory under §484.45 of the Conditions of Participation.

Best Practices:

• Complete the OASIS within the first five days of care.

• Encode and transmit within 30 days of completion.

• Ensure clinical and administrative staff understand how OASIS responses affect PDGM grouping, functional scoring, and quality measures.

Incomplete or inconsistent OASIS data directly delay payments and risk CMS data validation errors.

5. Quality and HHVBP: Tying Care to Payment

2025 marks the first year of actual payment adjustments under the expanded HHVBP Model. Agencies performing above the national benchmark can earn up to a 5% bonus, while lower-performing agencies risk equivalent reductions.

Focus Areas to Improve HHVBP Scores:

• Timely initiation of care after hospital discharge.

• Reduction in acute-care hospitalizations during episodes.

• Improvement in medication management and adherence.

• Patient-reported outcomes such as mobility and self-care improvement.

• Efficient, consistent documentation within OASIS-E1.

HHVBP not only drives reimbursement but also impacts public star ratings and market competitiveness.

6. Clinical Documentation: The Core of Compliance and Billing

Documentation remains the lifeline of reimbursement. CMS auditors and Medicare Administrative Contractors (MACs) continue to scrutinize the Plan of Care (POC), visit notes, and skilled-need justification. Every billed service must be supported by documentation that meets the Conditions of Participation under §484.55 (Comprehensive Assessment) and §484.60 (Plan of Care).

Documentation Essentials:

• Each visit note must clearly demonstrate a skilled need.

• POC must align with actual visit frequencies and disciplines.

• All orders must be authenticated by a physician or allowed practitioner.

• Ongoing assessments should document measurable progress or decline.

• Homebound status must be clearly stated and supported by the narrative.

Agencies should conduct monthly internal audits and educate staff on “negative charting” principles to show why continued skilled services are required.

7. Avoiding Common Billing Pitfalls in 2025

Errors that trigger claim denials, audits, or delays often stem from small process gaps. Stay ahead by reinforcing internal controls in these key areas:

Frequent Problem Areas:

• Late NOAs: Automatically triggers payment penalties.

• OASIS-Claim Mismatch: Diagnoses or functional scores not aligning between documents.

• Unplanned LUPAs: Visit cancellations causing unintended payment reductions.

• Unsigned Orders: Missing physician signatures on verbal or written orders.

• HHVBP Variance Confusion: Billing staff unaware of HHVBP payment adjustments on remittance advice.

Develop a pre-billing checklist that includes all required documentation verification before submission to avoid denials.

8. Aligning Billing with Conditions of Participation

To remain compliant, agencies must tie every billing function to the Medicare Conditions of Participation (CoPs):

CoP ReferenceBilling-Related Expectation§484.55Comprehensive assessment must include OASIS data and be completed promptly.§484.60Plan of Care must be individualized and reflect all ordered services.§484.65QAPI must monitor billing accuracy and process improvement outcomes.§484.70Organizational structure must support effective billing and data management.§484.100Clinical records must be accurate, readily retrievable, and complete for billing verification.

Billing success is not just financial—it is a compliance benchmark CMS uses to gauge operational integrity.

9. Strategic Recommendations for 2025

A. Strengthen Your Front-End Intake Process

Train staff to collect complete, accurate data at referral—payer verification, diagnosis confirmation, and prior home health episodes—to prevent eligibility or billing rejections later.

B. Automate Where Possible

Use EMR-integrated billing software with auto-alerts for LUPA thresholds, NOA deadlines, and unsigned orders. Automation enhances compliance and reduces human error.

C. Conduct Mock Surveys and Revenue Audits

Quarterly audits simulate survey conditions, ensuring billing accuracy and compliance alignment with CoPs and PDGM criteria. Identify revenue leaks early and implement corrective action plans.

D. Integrate QAPI with Revenue Cycle Management

Incorporate billing accuracy and timeliness indicators into your Quality Assurance and Performance Improvement (QAPI) program. Continuous performance evaluation keeps your billing process survey-ready and financially sound.

10. What Still Works in 2025

Even with new rules, the core principles of successful home health billing haven’t changed:

• Timely documentation and clean claim submission remain the fastest path to payment.

• Educated clinical staff prevent compliance errors before they start.

• Strong administrative oversight ensures consistency and accountability.

• Effective communication between clinical and billing departments keeps operations aligned.

• Proactive monitoring of denials and payment trends builds resilience and financial stability.

Agencies that combine compliance, accuracy, and efficiency continue to thrive—regardless of payment environment shifts.

Conclusion

Billing in home health for 2025 requires precision, foresight, and seamless collaboration between administrative and clinical teams. The modest payment updates may not revolutionize the industry, but the increasing link between quality performance and reimbursement is reshaping agency priorities.

Whether you’re adapting to OASIS-E1, managing HHVBP adjustments, or refining PDGM strategies, success in 2025 depends on your ability to stay compliant and agile. Strong processes, well-trained staff, and ongoing education remain the pillars of profitability and compliance.

For expert guidance, mock billing audits, compliance reviews, and ongoing revenue cycle management support, connect with SummitRidge Consulting. Our team specializes in Medicare-certified home health billing optimization, helping agencies stay compliant, efficient, and profitable in a constantly evolving healthcare landscape.