In home health, even the smallest coding mistake can ripple into big consequences. A wrong code or a missed detail doesn’t just slow billing, it can lead to lower reimbursements, denials, compliance flags, and hours of rework for staff. Under PDGM, where payment depends so heavily on accurate coding and OASIS alignment, the stakes are higher than ever.

There are seven most common coding errors home health agencies run into. By understanding these pitfalls, home health agency leaders, Quality managers, and coders can strengthen documentation, reduce audit risk, and keep revenue intact.

A broader view of how coding and OASIS review shape reimbursement, compliance, and care quality is available in the [Complete Guide for Home Health Agencies in 2025].

Misaligned Primary Diagnosis with Clinical Group

PDGM payment starts with one simple question: What is the patient’s primary diagnosis? That code determines the clinical grouping, which drives reimbursement.

The problem arises when coders choose a diagnosis that doesn’t reflect the actual condition driving care. For example, documenting a vague code like “fatigue” instead of a specific clinical condition such as “congestive heart failure with dyspnea”. The first lands the case in an “invalid” or “questionable encounter” group, while the second ensures appropriate reimbursement tied to skilled nursing and therapy needs.

How to avoid this mistake:

• Confirm that the primary diagnosis reflects the reason for skilled services.
  
• Review the physician order and OASIS responses side by side before finalizing the code.
  
• Flag “questionable encounter” codes during Quality Assurance review and replace them with billable, condition-driven alternatives.

Underspecified ICD-10 Codes

“Unspecified” codes are tempting because they’re quick. But Medicare wants accuracy and specificity. A general code like “unspecified pain” often triggers denials or lower reimbursement tiers.

Why it matters: OASIS and PDGM are designed around detailed patient data. An underspecified code not only hurts payment but also creates compliance exposure during an audit.

How to avoid this mistake:

• Always code to the highest level of specificity supported by the documentation.
  
• Build a checklist: Does this code identify location, laterality, and severity when required?
  
• Train clinicians to document details (for example, “right hip fracture” vs. “hip fracture”) so coders can assign the correct ICD-10 code.

Incorrect Timing or Admission Source Entry

PDGM distinguishes between early vs. late episodes and community vs. institutional admissions. A single checkbox mistake can lead to an incorrect reimbursement classification.

• Early vs. Late: The first 30-day period is always considered “early.” Subsequent periods are “late.” Mislabeling can distort payment rates.
  
• Admission Source: If the patient was recently discharged from an institutional stay, the case qualifies as “institutional,” which typically reimburses higher than “community.” Getting this wrong leaves money on the table.

How to avoid this mistake:

• Validate admission details with discharge paperwork.
  
• Use an intake checklist that clearly records the last setting of care and admission timeline.
  
• Add a Quality Assurance checkpoint specifically for timing and admission source before submission.

Missing or Weak Supporting Documentation

A code by itself is never enough. Medicare requires documentation that supports the patient’s condition and the medical necessity of services. Missing physician narratives, vague notes, or absent clinical justifications weaken the claim.

How to avoid this mistake:

• Ensure that each code ties back to detailed clinical documentation: symptoms, interventions, and patient goals.
  
• Physician narratives should clearly reinforce the coding and OASIS answers.
  
• Make documentation reviews part of every QA round, not just the final submission.

OASIS and Coding Mismatch

PDGM integrity depends on OASIS responses aligning with coded diagnoses. If OASIS suggests low functional impairment but the diagnosis points to high-acuity care, auditors flag the inconsistency.

Example: If OASIS functional scoring indicates independence in ambulation, but the coded diagnosis reflects severe gait abnormality, Medicare may question the accuracy of the record.

How to avoid this mistake:

• Compare OASIS responses with coded conditions at admission and recertification.
  
• Train clinicians on how functional scoring impacts payment and compliance.
  
• Use internal audit protocols that specifically flag mismatches before claims submission.

Ignoring Co-occurring Conditions Opportunities

Secondary diagnoses are not just clinical notes, they directly impact payment. Under PDGM, certain comorbidities can increase reimbursement tiers.

Commonly missed conditions:

• Diabetes
  
• Chronic kidney disease (CKD)
  
• Depression
  
• Obesity

Each of these, when properly coded, can place the patient into a higher comorbidity adjustment group. Skipping them means agencies lose legitimate revenue.

How to avoid this mistake:

• Review the full patient history at every admission and recertification.
  
• Create a standing checklist of commonly missed secondary diagnoses.
  
• Collaborate with clinicians to ensure comorbidities are clearly documented and coded.

Not Performing Pre-Submission Quality Assurance Checks

Many coding errors are not about the code itself but about missing reviews. Submitting without QA leads to denials, delays, and rework.

Why this matters: A concurrent review process—where documentation and coding are checked in real-time—catches errors before they reach billing. Retrospective reviews help, but they cannot prevent payment delays.

How to avoid this mistake:

• Build pre-submission QA into your workflow at admission, recertification, and discharge.
  
• Use a standardized internal checklist.
  
• Consider external coding support when in-house bandwidth is stretched or denial rates are rising.

Home health coding is not just about compliance, it directly shapes agency revenue, staff workload, and audit risk. By avoiding these seven common mistakes, agencies can protect their financial stability and build a stronger foundation for patient care.

Small improvements in coding accuracy ripple outward: fewer denials, smoother billing, and less stress for staff. With structured QA, clear documentation, and careful attention to PDGM rules, agencies can safeguard both their operations and their patients’ trust.

Frequently Asked Questions