Home Health Audits: What Agencies Need to Know and How to Prepare

Home health audits can examine far more than a single claim. Depending on who conducts the review and why it was initiated, an audit may examine Medicare eligibility, documentation, billing, coding, plans of care, OASIS data, clinician practices, or compliance with the Conditions of Participation.

That makes audit readiness an ongoing operational responsibility rather than something that begins when an Additional Documentation Request arrives.

Recent Medicare data shows why documentation deserves particular attention. CMS reported a 6.7 percent improper payment rate for home health services in the 2024 reporting period, representing an estimated $1.1 billion. Insufficient documentation accounted for 51.4 percent of those improper payments, followed by medical necessity at 33.7 percent.¹

Understanding the different types of home health audits, what reviewers are looking for, and where documentation commonly falls short can help agencies identify problems before an outside reviewer does.

What are home health audits?

Home health audits are reviews used to determine if an agency's records, claims, care delivery, or operations comply with applicable Medicare requirements.

The term "audit" is often used broadly, but agencies can encounter several distinct forms of oversight.

Medicare Fee-for-Service medical reviews may be conducted by Medicare Administrative Contractors (MACs), Supplemental Medical Review Contractors (SMRCs), Recovery Audit Contractors (RACs), Unified Program Integrity Contractors (UPICs), and other reviewers. These reviews can involve an Additional Documentation Request, commonly called an ADR, asking the agency to submit medical records supporting billed services.²

Agencies may also encounter:

• Targeted Probe and Educate reviews: CMS uses TPE to focus on providers with high claim error rates, unusual billing patterns, or services associated with high national error rates. A traditional TPE round generally reviews 20 to 40 claims.³

• OIG audits: The HHS Office of Inspector General conducts audits examining Medicare billing and payment compliance across home health agencies.

• Certification and recertification surveys: These evaluate compliance with Medicare's Home Health Conditions of Participation under 42 CFR Part 484. CMS guidance states that recertification surveys must occur no later than 36 months after the previous standard survey.⁴

• Internal audits: Agencies can conduct their own reviews of clinical records, billing, OASIS documentation, care plans, clinician practices, and other areas before claims or records receive outside scrutiny.

These reviews differ in scope, but they share a common theme: the documentation needs to support what happened clinically, why the patient qualified for services, what was ordered, what was delivered, and what was billed.

What do home health auditors look for?

There is no single home health audit checklist that applies to every review. Still, several areas repeatedly appear in CMS guidance and federal audit findings.

Medicare eligibility and homebound status

For Medicare to cover home health services, CMS requires the patient to meet specific eligibility conditions. Among other requirements, the patient must be confined to the home, under the care of a physician or allowed practitioner, receive services under an established and periodically reviewed plan of care, and require qualifying skilled services.¹

Homebound documentation can become particularly important during a claim review.

CMS describes homebound status using two criteria: 

1. The patient must require assistance, special transportation, a supportive device, or have a condition for which leaving home is medically contraindicated. 

2. The record must support that the patient normally cannot leave home and that doing so requires considerable and taxing effort.¹

A statement such as "patient is homebound" by itself does little to explain how the patient meets those requirements. Stronger documentation connects the patient's condition and functional limitations to the reason leaving home is difficult.

Skilled need and medical necessity

Records should also demonstrate why skilled home health care was needed.

The clinical record should make it possible for a reviewer to follow the connection between the patient's diagnosis, assessment findings, functional limitations, skilled interventions, goals, and response to treatment.

This is one reason templated notes can create problems. Documentation may appear complete from a formatting standpoint while saying very little about why skilled care was required for that patient on that date.

CMS's 2024 improper payment data attributed 33.7 percent of home health improper payments to medical necessity issues.¹

A useful internal audit question is therefore:

Could someone unfamiliar with this patient understand why the service required skilled care by reading the record alone?

If the answer is no, additional documentation training or workflow changes may be needed.

Certification, face-to-face encounters, and plans of care

Certification requirements remain another frequent source of scrutiny.

CMS requires certification supporting the patient's homebound status, need for qualifying skilled services, establishment and periodic review of the plan of care, and the patient's care under the appropriate practitioner. The required face-to-face encounter must generally occur no more than 90 days before or within 30 days after the start of home health care and must relate to the primary reason for home health services.¹

The plan of care also needs to reflect the patient's assessed needs. CMS states that it should identify the required services, responsible disciplines, frequency and duration of visits, and other required elements. Therapy plans must include measurable treatment goals and expected duration of services.¹

Recent OIG findings illustrate the financial significance of these requirements. In a 2026 compliance audit of VNS Health, OIG reviewed 100 sampled claims and found that 16 did not fully comply with Medicare billing requirements. Findings included billing and coding errors, face-to-face encounter issues, and plan-of-care deficiencies.⁵

OASIS, quality reporting, and survey readiness

Home health audits are not limited to claims.

CMS surveyors evaluate agency compliance with the Home Health Conditions of Participation by reviewing clinical records, observing care, and interviewing patients, caregivers, and agency staff.⁴

This means an agency can have technically complete records and still encounter problems if day-to-day practices do not match policies or the patient's plan of care.

Several areas deserve regular internal review.

OASIS accuracy

OASIS data affects quality reporting and plays a significant role in home health operations. CMS requires agencies to update the comprehensive assessment, including applicable OASIS requirements, at specified points in care. These include scheduled reassessments, certain returns home following hospitalization, and discharge.⁶

An internal audit should examine more than timely submission. Review whether the OASIS responses are supported by the rest of the clinical record.

For example, if one clinician documents that a patient requires substantial assistance with mobility while another assessment describes independent mobility, the inconsistency should be investigated.

Plans of care versus care actually delivered

Surveyors may compare the current plan of care with clinical documentation and direct observations of care.

CMS's survey guidance specifically describes home visits as a way to determine if care meets Medicare health and safety standards and follows the patient's plan of care.⁴

Internal audits can use the same principle. Select several patient records and trace them from assessment through orders, visits, documentation, reassessments, and discharge.

The goal is to determine if the story stays consistent from beginning to end.

Staff competency and agency processes

Home health survey requirements extend beyond clinical notes. Conditions of Participation cover areas such as quality assessment and performance improvement, infection prevention and control, skilled professional services, home health aide services, clinical records, personnel qualifications, and emergency preparedness.⁴

For that reason, audit preparation should include training records, competency documentation, policies, incident processes, and quality improvement work alongside chart reviews.

For organizations managing education across multiple teams or locations, a standardized home health and hospice training program can help create more consistent expectations around documentation and care delivery.

How to conduct an internal home health audit

Waiting for an external audit to identify documentation problems is an expensive way to learn where workflows are breaking down.

A recurring internal audit program can sample records before patterns spread across hundreds or thousands of claims.

Start by defining what you want to test. A useful audit might focus on one topic at a time, such as homebound documentation, therapy medical necessity, OASIS consistency, physician signatures, or coding accuracy.

Then select a representative sample of records. Avoid reviewing only the cleanest or most recent charts. Include different clinicians, disciplines, referral sources, diagnoses, branches, and lengths of stay.

For each record, trace the documentation through the entire episode of care:

1. Does the referral support the reason for home health?

2. Is eligibility documented?

3. Does the face-to-face documentation support the primary reason for services?

4. Does the assessment support the plan of care?

5. Do visit notes support skilled need?

6. Are frequency and duration consistent with orders?

7. Are changes in condition reflected throughout the record?

8. Does OASIS documentation align with clinical findings?

9. Are required signatures and dates present?

10. Does the claim match the documentation?

After the review, look for patterns rather than treating every error as an isolated event.

If eight clinicians make the same documentation mistake, the problem may be related to training, templates, workflow design, or unclear agency expectations rather than individual performance.

CMS's TPE model takes a similar improvement-oriented approach. Providers selected for traditional TPE generally receive education after a review round and are given time to correct identified issues before subsequent claims are examined. Persistent problems after three rounds may lead to further CMS action, including 100 percent prepayment review, extrapolation, or referral to another auditor.³

Example: Finding an audit risk before Medicare does

Consider an agency performing an internal review of 25 recent therapy records.

The review finds that 22 records include a homebound statement. At first glance, that appears reassuring.

A closer review finds that nine simply state:

"Patient is homebound due to weakness."

The documentation does not describe the assistance required to leave home, the patient's use of an assistive device, the taxing nature of leaving home, or how the patient's condition limits normal trips outside the residence.

The agency then reviews additional records and discovers that the same wording appears across multiple clinicians.

Instead of correcting nine individual notes and moving on, the agency identifies the underlying issue: its documentation template asks clinicians to confirm homebound status but does not prompt them to document the facts supporting it.

The agency revises the workflow, provides targeted education, and audits another sample several weeks later.

That is the value of internal home health audits. The goal is not simply to find missing fields—it is to identify systems that repeatedly produce documentation or compliance risk.

Make audit readiness part of normal operations

The strongest preparation for home health audits happens well before an audit notice arrives.

Claims, OASIS assessments, plans of care, visit documentation, staff training, and agency policies should tell the same story. When those pieces conflict, external review becomes harder to defend.

Federal oversight also continues to change based on identified payment risks. In April 2026, for example, OIG announced a nationwide Medicare compliance audit focused on home health claims billed with institutional admission source codes 61 or 62 after prior audits found incorrect use of those codes.⁷

Agencies therefore benefit from treating audit readiness as a recurring cycle: review current requirements, sample records, identify patterns, educate staff, correct workflow problems, and measure again.

A home health audit should not be the first time an organization discovers how its documentation would look to an outside reviewer.

References

¹ Centers for Medicare & Medicaid Services. Home Health Services: Medicare Provider Compliance Tips. Updated February 11, 2026.
https://www.cms.gov/training-education/medicare-learning-networkr-mln/compliance/medicare-provider-compliance-tips/home-health-services

² Centers for Medicare & Medicaid Services. Additional Documentation Request. Updated March 4, 2026.
https://www.cms.gov/data-research/monitoring-programs/medicare-fee-service-compliance-programs/medical-review-education/additional-documentation-request

³ Centers for Medicare & Medicaid Services. Targeted Probe and Educate. Updated March 4, 2026.
https://www.cms.gov/data-research/monitoring-programs/medicare-fee-service-compliance-programs/medical-review-and-education/targeted-probe-and-educate-tpe

⁴ Centers for Medicare & Medicaid Services. State Operations Manual, Appendix B: Guidance to Surveyors, Home Health Agencies.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_b_hha.pdf

⁵ U.S. Department of Health and Human Services, Office of Inspector General. Medicare Home Health Agency Provider Compliance Audit: VNS Health. March 30, 2026.
https://oig.hhs.gov/reports/all/2026/medicare-home-health-agency-provider-compliance-audit-vns-health/

⁶ Centers for Medicare & Medicaid Services. Home Health Quality Reporting Requirements. Updated July 7, 2026.
https://www.cms.gov/medicare/quality/home-health/home-health-quality-reporting-requirements

⁷ U.S. Department of Health and Human Services, Office of Inspector General. Nationwide Medicare Compliance Audit of Home Health Claims Billed With an Institutional Admission Source. Announced April 23, 2026.
https://oig.hhs.gov/reports/work-plan/browse-work-plan-projects/nationwide-medicare-compliance-audit-of-home-health-claims-billed-with-an-institutional-admission-source/