Top 5 PDGM Mistakes That Are Draining Your Agency (and How to Fix Them Fast)

If you work in home health, you already know: PDGM can make or break your agency’s bottom line.

The Patient-Driven Groupings Model (PDGM) is Medicare’s home health payment system that ties reimbursement to patient characteristics — not just the number of therapy visits. But here’s the problem: many agencies still leave money on the table (or worse, get audited) because they’re falling into the same costly traps.

In this post, we break down the top 5 PDGM mistakes agencies make — plus actionable tips to fix them fast.

👉 Pro tip: Use our free PDGM lookup tool here to instantly check ICD-10 codes, clinical groupings, and comorbidity adjustments.

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1️⃣ Incorrect or Incomplete Primary Diagnosis

What goes wrong: Choosing vague or non-groupable primary diagnoses like “muscle weakness” or “unsteady gait” that don’t map to a PDGM clinical group.

Why it’s costly: Without a valid primary diagnosis, your claim won’t group — and you risk payment cuts or denials.

How to fix it: ✅ Intake teams should gather detailed referral info. ✅ Coders must prioritize PDGM-approved codes. ✅ Use tools like our PDGM lookup tool to double-check clinical group mapping.

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2️⃣ Missing or Non-Compliant Face-to-Face (FTF) Documentation

What goes wrong: The FTF encounter is missing, outdated, or doesn’t match the home health plan of care.

Why it’s costly: Medicare requires a compliant FTF to pay the claim. Without it, you’ll face 100% payment loss.

How to fix it: ✅ Educate referral sources on FTF requirements. ✅ Add intake checklists to confirm FTF presence. ✅ Run pre-claim audits to catch issues.

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3️⃣ Poor Functional Assessment and OASIS Errors

What goes wrong: Clinicians under- or over-score functional status in OASIS, skewing the impairment level.

Why it’s costly: PDGM payment partly depends on functional impairment. Inaccurate scoring leads to underpayment or audit risk.

How to fix it: ✅ Train staff with case examples and scoring guides. ✅ Use peer reviews or team audits before submission. ✅ New! Our PDGM lookup tool now generates OASIS documentation examples based on the selected diagnosis code — giving field staff clear guidance on compliant documentation. Try it here and help your clinicians stay on track.

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4️⃣ Misclassifying Early vs. Late Episodes

What goes wrong: Intake teams miss prior home health episodes, causing incorrect “early” or “late” timing classification.

Why it’s costly: Payment rates differ based on episode timing. Misclassification can lead to underbilling.

How to fix it: ✅ Check Medicare’s Common Working File (CWF) for prior episodes. ✅ Flag returning patients. ✅ Improve communication between intake, billing, and clinicians.

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5️⃣ Ignoring Comorbidity Adjustments

What goes wrong: Agencies miss capturing comorbidities that increase payment.

Why it’s costly: Secondary diagnoses can add significant dollars. Missing them = lost revenue.

How to fix it: ✅ Review past medical history at intake. ✅ Train coders on eligible comorbidities. ✅ Use our PDGM lookup tool to check comorbidity tiers.

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Next Steps: Boost PDGM Performance Today

Want to stay ahead?

✅ Bookmark our free PDGM lookup tool — your go-to resource for compliant coding, grouping, and documentation examples. ✅ Download our PDGM cheat sheet for quick reference (coming soon!). ✅ Schedule internal training to refresh staff knowledge.

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Final Takeaway

PDGM isn’t just a billing system — it’s the backbone of your agency’s financial health. By mastering these five areas, you can:

✅ Protect revenue, ✅ Reduce denials, and ✅ Deliver better patient care.

Start now: audit your current workflows, train your team, and take advantage of smart tools like our PDGM lookup tool — now with OASIS documentation guides — to stay compliant and profitable.