Are You Leaving Money on the Table?

Home health episode payment varies ranging from approximately $2,000-$5,000 per Medicare standardized 60 day period with adjustments based on patient condition and location.   Inaccurate scoring of the Outcome and Assessment Information Set (OASIS) and incorrect ICD-10 coding lead to significant financial losses for home health agencies. Under the Patient-Driven Groupings Model (PDGM), reimbursement rates are directly tied to these assessments, meaning errors directly affect revenue.  

How errors lead to "money left on the table" 

1. Lost reimbursement 

• Case-mix misclassification:  Missed or improperly scored item on an OASIS assessment can move a patient into a lower-paying case-mix group which results in underpayment for the services provided. A single error can reduce reimbursement by hundreds of dollars per 60-day episode of care. 
• Inaccurate ICD-10 codes:  Overlooking relevant secondary diagnoses or selecting unspecific ICD-10 codes can lead to under-reporting a patient's overall clinical complexity. Since reimbursement under PDGM is influenced by comorbidities, this results in lower payments. 
• Missed diagnoses:  Failure to document all diagnoses supported by the clinical record can lead to a lower reimbursement rate or a claim denial. 
• Incorrectly classifying episodes:  The PDGM pays differently for early and late episodes of care. Misclassifying these can lead to payment errors.  

  2. Claim denials and audits 

• Denied claims:  Insurance companies may deny claims that contain coding errors or insufficient documentation. If eligibility details are missed, the entire claim can be denied, leaving the agency to absorb the cost of care. 
• Audit penalties and recoupments:  Regulatory bodies, such as the Centers for Medicare & Medicaid Services (CMS), scrutinize home health claims. Repeated OASIS errors or inaccurate coding can trigger audits, which may lead to financial penalties and forced repayment of previously billed claims.  

  3. Operational inefficiencies 

• Additional clinician hours:  Clinicians must spend time correcting documentation and coding errors instead of focusing on patient care. These hours add up, especially in large agencies. 
• Revenue cycle disruption:  Denied claims create billing bottlenecks and delay cash flow, diverting administrative staff time to track and resubmit claims. 
• Training burdens:  The complexity of ICD-10 and frequent updates to OASIS (such as OASIS-E1) require continuous staff training, which can be a significant cost.  

  4. Marketplace disadvantages 

• Lower quality scores:  OASIS data is used by CMS to determine an agency's Star Rating. Inaccurate data can lower an agency's rating, which can reduce referrals from hospitals and physicians. 
• Reduced value-based purchasing (VBP) score: Under the Home Health Value-Based Purchasing (HHVBP) model, payment is adjusted based on an agency's quality of care. Inaccurate OASIS scoring (particularly on measures like the Discharge Function Score) directly impacts VBP scores and can result in reduced payments.  

  Examples of common mistakes that cost money 

• Inaccurate functional scoring: Incorrectly rating a patient's ability to perform daily activities on the OASIS can negatively affect both payment and quality scores. 
• Missing or incomplete data: Failing to document all relevant clinical information, including comorbidities, can lead to inaccurate coding and missed reimbursement opportunities. 
• Lack of coordination: When clinical documentation does not fully support the codes assigned by the billing department, it can lead to coding errors and denied claims. 

Kenyon HomeCare Consulting understands the significant of the appropriate OASIS scoring and the subsequent ICD-10 coding.  With the assistance of Berg Data Solutions, Kenyon HomeCare consulting can assess an agency's  financial health and identify the causes of decreased financial reimbursements.  Kenyon HomeCare Consulting has a robust ICD-10 Coding department with RN home Health Certified OASIS and ICD-10 coding experts.  If you are struggling with reimbursement issues, call Kenyon HomeCare Consulting at 206 721 5091 or email gkenyon@kenyonhcc.com