Home Health & PDGM: What Providers Need to Know for Claims That Get Paid

Every week, your team provides care for patients who require skilled assistance at home. However, too many claims are denied, payments are delayed, and audits feel like a surprise test you never studied for. The Patient-Driven Groupings Model (PDGM) and Medicare PDGM have altered payment rules, adding extra work for clinicians, coders, and billers. You know the care is right, but the chart doesn’t always tell the same story the payer needs to see. That gap is what costs time and money.

This blog is the fix. It highlights common problems that cause denials, including unclear start-of-care notes, missing physician orders, OASIS answers that don’t match the chart, and diagnosis lists that don’t align with the care provided. It provides simple, practical steps to address them. You’ll develop easy-to-use habits for cleaner documentation, clear methods for building claims, and effective checks for home health billing and claims processing, ensuring faster payments. If your team follows these steps, PDGM won’t be a headache anymore; it will simply become the way you document great care and get paid for it.

What is PDGM?

PDGM stands for the Patient-Driven Groupings Model. Medicare PDGM changed how Medicare pays for 30-day home health episodes. Instead of paying based on the number of therapy visits a patient receives, PDGM pays based on the patient’s clinical needs and characteristics. This means that for PDGM home health care, the diagnosis, timing, admission source, and other clinical facts are what control payment. For agencies, that changes the work, clinical notes, orders, and OASIS answers now directly affect payment. If a chart does not clearly indicate why a patient requires skilled care, the payment may be incorrect or the claim may be denied. That is why every person who touches the record should be familiar with the PDGM rules.

The Components that Drive PDGM Payment

Timing

PDGM groups each 30-day episode using several clinical and timing components. The first component is timing. Timing asks if the episode is “early” or “late.” An episode is considered early if the patient has been off home health care for 60 days or more before the start of care. Otherwise, it is late, and timing changes the payment weight for the episode.

Admission Source

The next component is the admission source. The admission source indicates whether the patient came from the community or from an institutional stay, such as a hospital or skilled nursing facility. Episodes that begin after a recent institutional stay often carry different payment weights than those that start from the community.

Clinical Grouping

The third component is the clinical grouping. The primary diagnosis and the clinical facts in the record determine the clinical group. These groups are designed to match payment to expected clinical needs.

Comorbidity Adjustment

The fourth component is comorbidity adjustment. If the patient has other medical conditions that affect care, such as diabetes or heart failure, these comorbidities can result in an upward adjustment of the payment.

Therapy / Functional Category

The fifth component is the therapy/functional category. PDGM separates some episodes by expected therapy needs and by functional status. Together, these components determine the case mix for the episode and establish the payment amount.

Additional Payment Adjustments

Beyond those case-mix components, PDGM payments can be affected by other adjustments, such as LUPA (Low Utilization Payment Adjustment) when an episode has fewer visits than the threshold, Partial Payment rules for episodes that end early in the 30-day period, and Outlier Payment for unusually costly episodes. Mentioning these adjustments helps providers understand how the final payment may differ from the base case-mix amount.

What Does it Mean for Daily Work?

For clinicians and billers, PDGM means the chart must clearly show why home health care is needed and what skilled tasks were done. Below are the things teams must do every day and the rules that matter.

Start-of-Care notes — what to write

• Say the main problem in one short sentence (the primary diagnosis).
• Explain why the patient needs home health now (what happened, why it can’t wait).
• List the skilled tasks you will do (nursing visits, therapy tasks) and how often.
• Ensure the OASIS answers align with what the clinician wrote in the note.
  (If OASIS and the chart don’t match, the payer can deny or change the payment.)

60-day certification and recertification

• Every Medicare home health episode is tied to a 60-day certification period. The physician must certify that home health care is needed at the start of each 60-day period.
• If the patient continues past the first 60 days, the physician must recertify at least every 60 days and sign/date the recertification. Make this part of your 60-day workflow so claims are not held.

Face-to-face (F2F) encounter — timing and documentation

• The certifying physician (or an allowed non-physician practitioner) must have a face-to-face encounter that is related to the primary reason for home health.
• The F2F encounter must happen no more than 90 days before the Start of Care (SOC) or within 30 days after the SOC. If the F2F did not cover the new condition, the provider must see the patient again within 30 days after SOC. Document the date of the encounter and a short note that explains how the visit supports homebound status and the need for skilled care.

Orders — timing, content, and verbal orders

• The physician’s orders and the plan of care should be written, dated, and signed when the plan is established or as soon thereafter as possible. Certification must be signed and dated by the physician who establishes the plan.
• If there are verbal (oral) orders, the nurse or therapist who receives them must put them in writing and include the date they received the order. The written note must later be signed and dated according to your agency policy and regulatory rules. The written copy should include the date/time the order was given.

Signatures — what reviewers look for

Signatures must be legible, dated, and attributable to the clinician who signed. CMS accepts electronic signatures when they meet legal and MAC requirements, but unsigned or back-dated certifications risk denial. Don’t rely on an attestation to backdate a missing signature. Keep a clear signature log if needed.

Daily operational checklist (quick actions for teams)

• Before billing, check SOC chart, OASIS, physician orders, and F2F note — they must tell the same story.
• Confirm the physician signed the certification (and date is on or near the plan-of-care establishment).
• Confirm the F2F encounter date is within the 90-day/30-day window and that the note ties the encounter to the need for home health.
• If services continue, set a reminder ~10 days before day 60 to request recertification and any required signatures.
• For any verbal orders, ensure the receiving clinician documents date/time and puts the order into the chart promptly.

Documentation that Supports Payment

Clear documentation is the first defense against denials and audits. A good start-of-care note identifies the primary diagnosis in straightforward clinical language and links it to the patient’s specific needs. For example, suppose a patient is under the care of a wound specialist. In that case, the note should specify the wound type, location, and the reason why a nurse’s skill is required for dressing changes, debridement, or monitoring for infection.

If the patient has CHF, the note should indicate how CHF affects daily care, such as the need for daily weight checks, adjustments to diuretics, or skilled instruction on fluid restriction. Comorbidities should be documented when they change the plan or the level of care. When notes link the diagnosis to specific skilled tasks, coders can assign the right ICD-10 code, and the claim will reflect the patient’s true needs for home health billing.

OASIS, Coding, and the Claim Build

OASIS answers feed the agency’s systems and the payer’s case mix logic. If OASIS data and clinical notes disagree, you may receive an incorrect PDGM grouping. Clinicians should complete OASIS with care and accuracy. Coders should cross-check OASIS fields that affect case mix against the SOC and progress notes to ensure accuracy and completeness. Use the highest level diagnosis that is supported by documentation and include comorbidities only when they affect treatment or function.

When building the claim, include the correct SOC date, the admission source, and the exact diagnosis list that matches the chart. If your software produces a HIPPS-style output or a grouper result, review it carefully to ensure it aligns with the clinical record before submitting the claim to Medicare. Accurate coding and a consistent record make home health claims processing much smoother.

How Claims are Processed?

Home health claims processing begins when the clinical record and the claim are sent to the Medicare Administrative Contractor or the payer. The payer verifies that the claim includes the correct dates, diagnosis, and evidence that skilled services were required. Common errors happen when dates do not match, when the chart does not support a diagnosis on the claim, or when physician orders are missing or unsigned.

Another frequent problem is an incorrect admission source. If the claim lists the wrong admission source, the payment calculation will be bad. Small discrepancies in dates and data fields can result in denials or lower payments. Knowing the typical checks that payers run can help your team avoid these errors before submitting a claim.

Handling Denials and Appeals

When a claim is denied, start by carefully reading the reason for the denial. Pull the exact notes that the payer will want to see and check if the denial is a simple data error or a true disagreement about medical necessity. If the denial is due to a fixable data error, correct it and resubmit promptly. If the denial challenges medical necessity, gather supporting documentation that shows the skilled tasks performed and how they are tied to the diagnosis.

An appeal packet should include the relevant SOC, orders, OASIS, and clear progress notes. Timely, focused responses often have the best chance of recovery. Agencies that track denial reasons can spot patterns and train clinicians to close documentation gaps that cause the problems.

Working Together Across Your Agency

Home health billing is not only a job for coders and billers. It is a team process that includes clinicians, supervisors, and office staff. Simple tools help. A concise template for the SOC note, which asks the clinician to state the primary medical problem and the skilled reason for care, will reduce errors. Regular, short audits of a sample of charts can show where clinicians and coders disagree. Sharing denial trends with clinical teams helps everyone learn and prevents the same mistakes from repeating. Quick and clear communication with physicians for missing orders or clarifications speeds up claims and reduces the number of denied claims.

Therapy Under PDGM

Under PDGM, therapy still matters, but it matters differently. Payment is not tied to the number of therapy visits. Instead, therapy affects grouping when the patient’s condition justifies skilled treatment. Therapists should document the clinical reason for each visit, the professional service they provided, and the measurable functional goals. Progress notes should demonstrate skill development and progress toward goals. Over documenting therapy to chase payment invites review and audit. The safest approach is to document the true skilled need and the measurable outcomes that the treatment seeks to achieve.

Audit Readiness and Internal Controls

Medicare audits will look for consistent, clear documentation that supports medical necessity. Keep the SOC, orders, OASIS, and notes easily retrievable. Keep a file that contains key documents in order and assign one person to handle audit requests. Internal audits that focus on the most common denial reasons prepare your team to fix problems before a payer finds them. Track denial rates and audit results in a simple dashboard and set small corrective steps. Agencies that fix small issues quickly tend to avoid larger repayment demands later.

Practical Habits that Reduce Denials

Ensure that every SOC includes a one-sentence clinical statement that identifies the primary problem and explains the skilled need. Require a signed, date-stamped order that matches the plan of care and the SOC date. Ask clinicians to provide specific details when answering OASIS items and avoid relying on guesswork. Teach coders to verify that clinical notes support every diagnosis listed on the claim and are clearly linked to the corresponding care. Ensure your claim scrubber checks for PDGM-specific mismatches, such as incorrect admission source or SOC date. These habits help home health claims processing teams file cleaner claims and receive payment more quickly.

Technology and the PDGM Grouper

Most agencies use a PDGM grouper that is integrated into their software. The grouper takes the diagnosis list, admission source, timing, and other data and produces a payment group. Ensure your grouper settings align with the way your team documents care. Train staff to read the grouper output and verify it against the chart before submission. Claim scrubbers and EHR features that pull supporting notes for appeals save time when a claim is challenged. Software helps, but it cannot replace charting and judgment. Utilize technology to identify routine errors and expedite audit responses.

Common Myths and Clear Facts

There are a few myths that cause problems. One myth is that more therapy always results in higher pay. The fact is that PDGM prioritizes clinical need over volume. Another myth is that listing multiple diagnoses on a claim always results in higher payment. Only comorbidities that are clearly supported in the record and that impact care will result in a payment change. A final myth is that documentation is irrelevant if the patient truly needs care. The truth is that if documentation does not show the skilled need, payers will not accept the claim. Clear, consistent records are the foundation of successful home health billing.

Conclusion

PDGM put clinical facts at the center of payment for home health. For providers, that means focusing on clear documentation, consistent OASIS completion, accurate coding, and strong communication between clinicians and billers. Simple steps, such as concise SOC statements, signed physician orders, matching dates, and routine audits, make a significant difference. Use your grouper and claim scrubber to catch errors before submission and keep appeal folders ready when needed. When your team builds the claim from a record that tells the same story in all places, Medicare PDGM will pay as expected.