9 Shocking PDGM Challenges That Are Destroying Home Health Revenue — And Powerful Fixes You Need Now
The Patient-Driven Groupings Model (PDGM) transformed the home health billing industry, but not every agency is prepared for its complexity. Many agencies are still struggling with coding, LUPA thresholds, documentation issues, and revenue loss due to misunderstanding how PDGM works.
If your agency is facing denials, delayed payments, or compliance problems, you’re not alone. Thousands of home health providers are losing revenue because of avoidable mistakes.
This complete guide reveals 9 shocking PDGM challenges that are draining your revenue — and the exact steps to fix them quickly. With the right workflow (or the right billing partner), PDGM becomes an opportunity, not a burden.
What Is PDGM and Why Does It Matter?
PDGM, launched by CMS, replaced the old PPS model and now determines home health reimbursement based on patient characteristics rather than visit volume. It focuses on:
-
Clinical grouping
-
Comorbidity adjustment
-
Functional impairment
-
Admission source
-
30-day periods
-
LUPA thresholds
This means PDGM rewards accuracy, documentation, and smart care planning — and penalizes agencies that fail to meet compliance standards.
Accurate coding, strong documentation, and compliance are now the backbone of PDGM billing success.
1. Incorrect Primary Diagnosis Coding Under PDGM
The primary diagnosis determines the PDGM payment grouping. If the code is not acceptable or not specific enough, CMS will return the claim.
Common mistakes include:
-
Using vague or general codes
-
Selecting a non-payable diagnosis
-
Missing specificity such as laterality or severity
-
Failing to relate diagnosis to the Plan of Care
How to Fix It
-
Use PDGM-approved primary diagnosis codes
-
Ensure documentation supports the primary condition
-
Train coders on PDGM guidelines
-
Validate OASIS accuracy before billing
Accurate coding is crucial for PDGM success and revenue stability.
2. LUPA Threshold Mismanagement
Under PDGM, each 30-day period has its own visit threshold. Missing even one visit can turn a full payment into a LUPA, drastically reducing reimbursement.
Causes of LUPA Problems
-
Poor scheduling
-
Unplanned missed visits
-
Incorrect resource use
-
Inaccurate OASIS scoring
How to Fix It
-
Automate visit reminders
-
Track LUPA risks daily
-
Train clinicians on OASIS scoring
-
Use billing software with PDGM alerts
LUPA mismanagement is one of the biggest reasons agencies lose money under PDGM.
3. Incomplete or Weak Documentation
PDGM requires stronger documentation than PPS. Missing or vague documentation leads to claim delays, denials, or ADRs.
Common documentation failures include:
-
Missing clinical justification
-
Inconsistent notes
-
Incorrect OASIS responses
-
Lack of physician signatures
-
Poorly described functional impairment
How to Fix It
-
Use templates for PDGM documentation
-
Train clinicians monthly
-
Conduct documentation audits
-
Ensure Plan of Care supports all diagnoses
Strong documentation = stronger PDGM compliance.
4. Improper OASIS Assessment Under PDGM
OASIS drives functional impairment scoring under PDGM, which directly impacts reimbursement levels.
When OASIS is inaccurate, payment drops.
Common Issues
-
Underscoring functional impairment
-
Failing to document pain levels
-
Incorrect mobility scoring
-
Inexperienced nursing staff
How to Fix It
-
Provide OASIS accuracy training
-
Conduct dual-review OASIS audits
-
Use decision-support tools
-
Match OASIS answers with clinical notes
Under PDGM, OASIS accuracy is essential for proper payment.
5. Delayed Submission of NOA and Claims
NOA (Notice of Admission) errors or delays cause automatic payment reductions. PDGM amplifies these penalties.
Common Problems
-
Missing patient information
-
Delayed intake
-
Incorrect dates
-
Staff not aware of NOA deadlines
How to Fix It
-
Submit NOA within 5 days
-
Automate NOA reminders
-
Verify patient data before submission
Fast submission ensures cleaner PDGM claim processing.
6. Incorrect Comorbidity Adjustments
PDGM includes:
-
No comorbidity adjustment
-
Low comorbidity
-
High comorbidity
Many agencies fail to capture all comorbidities due to coding gaps or documentation mistakes.
How to Fix It
-
Code all clinically relevant diagnoses
-
Train staff on secondary coding rules
-
Conduct monthly comorbidity audits
Correct comorbidity levels can dramatically increase PDGM revenue.
7. Poor Communication Between Office and Field Staff
PD-GM demands tighter coordination between field clinicians, administrators, and billers.
Breakdowns in communication lead to:
-
Incorrect documentation
-
Delayed signatures
-
Missing clinical details
-
Denied claims
How to Fix It
-
Use EMR messaging features
-
Implement daily clinical-office communication
-
Assign PD-GM coordinators for accuracy checks
Strong internal communication = strong PD-GM performance.
8. Lack of PDGM Training and Updates
PD-GM rules are updated frequently by CMS. Agencies that don’t keep up fall behind in revenue and compliance.
How to Fix It
-
Monthly PD-GM training
-
Subscribe to CMS updates
-
Conduct quarterly audits
-
Hire PD-GM specialists
Training is not optional — it’s a necessity for survival under PD-GM.
9. Not Using a Professional PD-GM Billing Company
Many home health agencies simply do not have the resources or PD-GM expertise required to maintain accuracy and compliance.
A specialized billing company can:
-
Improve coding accuracy
-
Reduce denials
-
Speed up payments
-
Ensure strong documentation
-
Track LUPA risks
-
Handle ADRs and appeals
-
Provide real-time reporting
Why Choose Icon Billing LLC for PD-GM Billing?
Icon Billing LLC specializes in PD-GM billing, offering:
-
100% accurate PD-GM-compliant claim submission
-
Expert coding for PD-GM requirements
-
Daily LUPA monitoring
-
OASIS and documentation audits
-
Faster reimbursements
-
Reduced denial rates
-
Dedicated PD-GM billing experts
We help home health agencies eliminate financial stress and maximize their PD-GM potential.
Best Practices to Improve PD-GM Revenue Cycle
Here are proven strategies:
✔ Strengthen OASIS accuracy
More accurate scoring = higher PD-GM reimbursement.
✔ Streamline clinician documentation
Use structured templates.
✔ Automate PD-GM alerts
Help staff avoid LUPA thresholds and coding issues.
✔ Train monthly
PD-GM rules evolve often.
✔ Outsource complex tasks
Professional PD-GM billing dramatically reduces errors.
Conclusion
The PD-GM model has reshaped home health billing, and agencies must adapt quickly to avoid financial loss. The top challenges — coding errors, documentation gaps, LUPA mismanagement, OASIS mistakes, and compliance issues — can destroy revenue if not handled properly.
But with the right systems, training, and expert billing support, PD-GM becomes an opportunity for growth, not a threat.
Icon Billing LLC is here to guide your agency through every step of the PD-GM billing journey. If you’re ready to improve accuracy, compliance, and revenue — we’re ready to help.