Common Billing Errors in Home Health That Trigger Audits

In the home health industry, billing accuracy is not only a financial necessity—it’s a compliance requirement under the Medicare Conditions of Participation (CoPs). Mistakes in billing can result in delayed payments, denials, audits, or even accusations of fraud or abuse. Understanding the most common billing errors that lead to Centers for Medicare & Medicaid Services (CMS) scrutiny can help agencies maintain compliance and protect their reputation.

This article explores the most frequent billing mistakes that trigger audits and provides practical guidance for prevention.

1. Incomplete or Inaccurate OASIS Documentation

The Outcome and Assessment Information Set (OASIS) is the foundation for home health billing under the Patient-Driven Groupings Model (PDGM). Errors in OASIS data collection—such as inaccurate clinical groupings, missing functional scores, or mismatched diagnoses—can cause major discrepancies in reimbursement.

Common OASIS Errors:

• Failure to capture the correct start of care (SOC) or recertification assessment.

• Inconsistency between the OASIS assessment and the plan of care.

• Errors in functional scoring or non-alignment with the patient’s documented needs.

Compliance Tip:

Agencies must ensure Registered Nurse (RN) assessors complete OASIS documentation accurately and in a timely manner. Implement a clinical QA review process before submission to CMS, ensuring the data aligns with the 485 Plan of Care and all other visit notes.

2. Incorrect or Unsupported Primary Diagnosis Coding

Accurate coding under ICD-10-CM is critical for reimbursement and compliance. CMS audits often flag claims where the primary diagnosis does not justify home health eligibility or lacks sufficient supporting documentation.

Frequent Coding Issues:

• Using a non-billable or vague primary diagnosis (e.g., “weakness”).

• Failure to link comorbidities appropriately.

• Inconsistent diagnosis between the plan of care, OASIS, and visit notes.

Compliance Tip:

Maintain coding integrity by having all codes reviewed by a certified home health coder (HCS-D). Cross-check the primary and secondary diagnoses across all records to ensure consistency. Agencies should update codes promptly when a patient’s condition changes.

3. Insufficient Documentation to Support Skilled Need

Under 42 CFR §484.60, home health services must be reasonable, necessary, and require the skills of a licensed clinician. Medicare audits often focus on whether the patient truly met the criteria for homebound status and skilled services.

Red Flags:

• Missing or vague clinical notes that fail to demonstrate the skilled service.

• Inconsistent homebound documentation.

• Failure to show progress toward care goals or justification for continued care.

Compliance Tip:

All clinical documentation must explicitly state why the service requires a nurse or therapist’s skill. Each note should show patient progress, response to treatment, and continued medical necessity. Agencies should audit charts monthly to ensure compliance.

4. Billing for Visits Not Rendered or Incomplete Visits

Billing for services not rendered—or visits shorter than required for skilled intervention—constitutes a serious violation. These errors often occur due to misunderstanding of visit requirements or improper time tracking.

Examples of Non-Compliance:

• Missed visits billed as completed.

• Incomplete visit notes submitted without justification.

• Duplicate billing for the same visit date by multiple clinicians.

Compliance Tip:

Implement an Electronic Visit Verification (EVV) system that logs clinician time and location. Maintain detailed visit notes, including duration, intervention, and patient outcome, as required under 42 CFR §484.110 (Clinical Records).

5. Improper Use of LUPAs (Low-Utilization Payment Adjustments)

LUPAs occur when a patient receives fewer visits than projected, resulting in reduced payment. However, repeated LUPA patterns can signal potential incomplete care delivery or poor scheduling management.

Audit Risks:

• Frequent unexplained LUPAs may suggest inappropriate care planning.

• Missed visit documentation not aligning with physician orders.

• Lack of documentation explaining changes in frequency.

Compliance Tip:

Regularly review scheduling reports and clinical visit frequencies. If visits are missed, the reason should be documented and supported by communication with the physician. A QAPI (Quality Assurance and Performance Improvement) program should track and analyze LUPA trends.

6. Non-Compliant or Outdated Plans of Care

The 485 Plan of Care must be signed and dated by the physician before services begin and updated at least every 60 days. Missing or late physician signatures are among the top audit triggers.

Common Mistakes:

• Billing before receiving a signed plan of care.

• Missing certification or recertification signatures.

• Plan of care not reflecting all ordered disciplines or visit frequencies.

Compliance Tip:

Track all physician orders and signatures through a centralized log. No claims should be billed until verbal orders are documented and written orders are signed. Maintain communication with physicians to ensure prompt approvals.

7. Improper Face-to-Face (F2F) Encounter Documentation

A Face-to-Face Encounter (F2F) is required under 42 CFR §484.55 and must occur within 90 days before or 30 days after the start of care. Missing or invalid F2F documentation is one of the most common reasons for claim denials and audits.

Common Issues:

• Missing F2F documentation entirely.

• Physician notes not signed or dated.

• Encounter not related to the primary reason for home health services.

Compliance Tip:

Ensure that F2F documentation clearly identifies:

• The date of encounter.

• The certifying physician’s signature.

• The reason for home health services.
  Establish a process to track and verify F2F compliance prior to billing submission.

8. Incorrect Billing of Supplies and DME

Home health agencies may provide supplies as part of services, but errors occur when supplies are billed separately or not justified by the care plan.

Common Errors:

• Charging for supplies not documented in visit notes.

• Billing DME under home health when a separate supplier provided it.

• Overuse of costly or unnecessary supplies.

Compliance Tip:

Implement a supply management system that ties all supply usage to the clinical documentation. Review the cost-effectiveness and necessity of each supply, ensuring alignment with the patient’s needs and the plan of care.

9. Duplicate or Overlapping Billing Across Providers

When patients transfer between home health agencies or receive concurrent care (e.g., hospice or outpatient therapy), overlapping billing may occur. This raises compliance flags and can trigger Medicare claim audits.

Audit Triggers:

• Two agencies billing for the same dates of service.

• Overlapping therapy or nursing visits.

• Late discharge notifications causing dual claims.

Compliance Tip:

Always verify patient status in Medicare’s Common Working File (CWF) before claim submission. Notify CMS immediately when a transfer or discharge occurs, and maintain clear documentation of care transitions.

10. Failure to Correct Rejected or Returned Claims Properly

Sometimes, agencies rush to rebill rejected claims without investigating the root cause. Repeated resubmissions with errors can trigger CMS scrutiny and potentially elevate the agency’s audit risk level.

Frequent Causes:

• Incorrect adjustments after claim return.

• Billing under the wrong NPI or provider number.

• Ignoring claim-level remarks codes (RAs) from Medicare.

Compliance Tip:

Each returned or rejected claim should undergo a root cause analysis by the billing team. Maintain a claim correction log that details each issue and resolution, ensuring accuracy before resubmission.

11. Failure to Align Billing with Conditions of Participation (CoPs)

Many agencies focus on billing codes but neglect compliance with the broader Medicare CoPs governing operations, documentation, and quality assurance. Failing to integrate these standards increases audit vulnerability.

Key CoPs Affecting Billing:

• §484.55 – Comprehensive Assessment of Patients

• §484.60 – Care Planning and Coordination

• §484.70 – Infection Prevention and Control

• §484.100 – Reporting and Disclosure

• §484.110 – Clinical Records
  

Compliance Tip:

Develop a Billing Compliance Policy aligned with the Conditions of Participation. Conduct periodic internal billing audits and link findings to your agency’s QAPI program to demonstrate ongoing improvement.

Building a Culture of Compliance

Preventing billing errors is not just the responsibility of the billing department—it requires coordination across clinical, administrative, and compliance teams. Agencies should:

• Conduct monthly interdisciplinary billing audits.

• Implement electronic documentation reviews to catch errors early.

• Provide ongoing staff education on PDGM, OASIS-E, and compliance updates.

• Engage external consultants to perform mock billing surveys simulating CMS audits.

Conclusion: Protecting Your Agency From Audit Risk

Avoiding billing errors in home health requires a proactive compliance strategy rooted in accurate documentation, ongoing staff training, and strong internal controls. By understanding the common triggers for audits, home health agencies can ensure both financial stability and regulatory compliance.

For agencies seeking expert guidance, SummitRidge Consulting provides tailored solutions in billing compliance, Medicare readiness, and operational management. From internal audits to staff education and survey preparation, SummitRidge helps home health providers achieve excellence in both care delivery and compliance.