Audit Risks associated with Home Healthcare Agencies

Homecare agency management software

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According to the Office of Inspector General (OIG) Findings Report, 90% of the Comprehensive Error Rate Testing (CERT) audit denials of high-risk home health agencies were based on “insufficient documentation.” With the Affordable Care Act induced additional provisions, Home Healthcare Agencies have become a target of frequent audits.

Types of Audits that Home Healthcare Agencies go through

Home Healthcare Agency has to go through various audits. Being proper documentation or patient health, agencies need to be prim and proper. Some of these audits are;

● Risk Adjustment and Medical Record Reviews (MRRs)
Health plan payers or insurance agencies conduct this audit to validate the claims made by patients to rule out any fraudulent claims.

● Health Effectiveness Data & Information Set (HEDIS) Reviews
A review is conducted by the Payer or Health Plan agency to check the quality of treatment and care their patient is getting. It ensures that the Home Healthcare Agencies effectively perform the core tasks.

● Diagnosis-Related Group (DRG) Payment Integrity Reviews
Diagnosis-Related Group (DRG) classifies different hospital cases to various codes. These codes are verified to validate the claims made by patients.

● Care and Quality Improvement (CQI) Audits
Patients sometimes don’t realize the severity of the disease and might need preventive attention to avoid hospitalization. Healthcare agencies and Health plan providers collaborate to check these cases to reduce medical costs and enhance patient safety.

● Five-Star Program (Medicare Advantage)
A quality care audit wherein Healthcare Agencies are rated according to the service provided and client care.

Reason for Home Healthcare Audit to be institutionalized

A medical audit has importance for both home healthcare agencies and healthcare plan providers. Audit keeps a check on overpricing      and care provided to patients. Audits like Care and Quality Improvement (CQI) Audit and Five Star Program help improve the services provided to patients.

Preparedness needed in these Audits

According to the transcript of an Audio from the Office of Inspector General (OIG) of the United States Department of Health and Human Services (HHS), “Good documentation promotes patient safety and quality of care. Complete and accurate medical recordkeeping can help ensure that your patients get the right care at the right time.”

● Proper Documentation
Proper documentation involves proper handling and maintaining data. Keeping patient data safe and updated is the key. With data recording shifting to digital mode and solution software coming into the picture, the error rate comes down to zero.

● Error Correction from the previous audit
Rectification of error is the key in any business. An audit helps in finding out the errors. With proper management and remedial measures, error-proofing can be done reducing the scope of any discrepancy in the next audit.

● Updated Documentation
Maintaining patient data correctly and keeping it updated is the key. A Home Healthcare Agency needs to constantly edit patient data and add new data to avoid missing out on any patient and keep the data updated.

Challenges faced by Home Healthcare Agencies in Paper-based manual data entry

With the growing digital world, paper-based home healthcare agencies face a lot of limitations.

● Repetitive Tasks
With the paper-based model, planning is challenging. The conflicting job roles of a Home Healthcare Agency employee may increase the repetition of work. Same data recorded twice or more times may have an impact on cost, but it also takes a toll on the mental health of the employees.

● Scope of Error
Manual entry attracts personal bias and judgment. These judgments may sometimes lead to errors in data entry. With machine-based recording, these errors come down to zero. Software designed for this purpose provides better and more accurate data recording.

● High Cost
Be it minor expenditure of stationery or major costs of error in recording, a paper-based model attracts huge costs. This includes not just direct cost, but indirect cost as well through an error in reporting leading to audit failure. This takes a toll on the intangible asset of goodwill earned throughout the business.

● Nurse Burnout
Being engaged in monotonous and repetitive tasking, nurses might not be able to give full attention to the patients. With the increased workload of data recording, nurse dropout and burnout rates tend to increase over time.

● Quality Healthcare Delivery
The core task of any healthcare agency is to provide quality care to patients. With the employees’ fixated on no productive tasks, it may impact employee performance and might have an impact on audit reports checking the quality of Home Healthcare Agency services (Five-Star Program).

Impact of Audit Failure on a Home Healthcare Agency

Internal audit is beneficial for the firm by helping in understanding the area where the agency might be facing issues, but external audit failure attracts certain risks along.

 ● Negative impact on Goodwill
An audit is a check to verify the reliability of something. With audit failure, customers tend to doubt the agency and might even change their preferred healthcare agency. Goodwill of the agency accumulated over years of service vanishes soon.

● Customer Loss
Healthcare runs based on trust. With audit failure, customers tend to lose trust in the organization and may not feel safe. A sense of being cheated might disturb them and persuade them to change their desired healthcare agency.

● Heavy penalty
With non-compliance and audit failure, a heavy penalty is levied on the agency. This increases the overall cost that the agency might suffer apart from client loss.


Home Healthcare Agencies need to operate with care and comply with all regulatory guidelines. Keeping track of these guidelines is a cumbersome as well as an exhaustive task. Shifting to technology-driven solutions is the best option.

Based on a Clinical Protocol Approach, Aspect N helps Home Healthcare Providers monitor Clinical Adherence, Reduce the probability of manual errors, and streamline workflows to enable better productivity and compliance with regulatory norms.

AspectN is a transformation partner and a leading provider of customized, cloud-based, and innovative platforms and software solutions. We can partner with you in your journey of facilitating top-notch home healthcare services to those in need. While you hone your focus and success story in the field, we will create a strong tech-driven, secure, and scalable solution in the background that will help you evolve and grow ahead of your competition.

If you are looking for more information on how we can streamline your workflows, increase your efficiencies, and improve the quality of care, get in touch with us at or call on (615) 619-3000 to request a demo or an in-person meeting.




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