What Are the Different Types of Medicare Claim Rejections for Home Health & Hospice?

Few things disrupt a home health or hospice agency’s operations faster than a Medicare claim that doesn’t pay. Or worse, one that never even makes it into processing. Staff may see cryptic rejection codes, billing teams scramble to figure out whether something can be fixed, and leadership is left asking the same question over and over: 

“Why was this claim rejected, and what does it actually mean?”

Part of the frustration is that “claim rejection” is often used as a catch-all term. In reality, Medicare Part A rejections fall into distinct categories, each triggered by different issues and each carrying different levels of financial risk. Without understanding those differences, agencies can lose time, delay cash flow, or permanently forfeit reimbursement without realizing it.

*This article was written in consultation with Mariam Treystman.

At The Home Health Consultant, we work with Medicare-certified home health and hospice agencies nationwide on compliance systems and survey readiness. We’re writing this article to clearly explain: 

• The types of Medicare claim rejections
• Reasons why these Medicare claim rejections can occur
• How types of claim rejections affect agencies differently

After reading, you’ll be able to better understand where breakdowns happen and decide what level of support best fits their compliance journey.

What Is the Difference Between a Medicare Claim Rejection and a Denial?

Before breaking down rejection types, it’s critical to clarify terminology.

A claim rejection occurs before Medicare fully processes the claim. The claim is returned because required information is:

• missing,
• invalid, 
• or inconsistent…

…preventing Medicare from adjudicating (making a formal decision about it) at all. The claim must be corrected before it can move forward.

A claim denial, by contrast, occurs after the claim is processed. Medicare reviews the claim and determines that payment is not allowed, often due to coverage rules, medical necessity, or documentation deficiencies.

This article focuses specifically on claim rejections under Medicare Part A, not denials. This is because rejections represent upstream breakdowns in billing, enrollment, certification, and submission processes that agencies often underestimate until revenue is already delayed.

What Are Technical Medicare Claim Rejections in Home Health and Hospice?

Technical rejections occur when a claim fails basic submission requirements. These are system-level issues that prevent Medicare from accepting the claim for processing.

Common technical triggers include:

• Missing or invalid patient identifiers
• Incorrect dates of service
• Invalid or incomplete diagnosis or procedure codes
• Incorrect bill type or claim frequency code
• Mismatches between claim data and required assessment or election records

In home health, technical rejections often stem from misalignment between the claim and OASIS data. For example, let’s say the diagnosis coding on the claim conflicts with what was submitted on OASIS. In this case, Medicare’s system may be unable to group the claim correctly under PDGM (Patient-Driven Groupings Model). That mismatch can cause the claim to reject or be paid at an unexpectedly reduced rate.

Hospice agencies see similar issues when required modifiers, provider identifiers, or election data are missing or entered incorrectly. Even when services were properly delivered, a technically flawed claim never reaches payment review.

Technical rejections are usually correctable, but they delay reimbursement and increase administrative workload. Left unaddressed, they can create backlogs that affect cash flow across multiple billing cycles.

What Are Administrative Claim Rejections in Home Health & Hospice?

Administrative rejections occur when the claim violates Medicare’s program rules or eligibility requirements. Administrative rejections can occur even if the technical data is accurate.

These rejections often involve:

• Medicare eligibility or entitlement issues
• Overlapping services with another provider
• Failure to meet required timing rules
• Missing or late Notices of Admission or Election

Medicare Administrative Claim Rejections in Home Health

For home health agencies, one of the most common administrative breakdowns involves Notice of Admission (NOA) requirements. Medicare requires the NOA to be submitted within five calendar days of the start of care. 

If the NOA is late, Medicare reduces payment for each late day. If no NOA is on file at all, the claim will not be paid until the issue is resolved, and some days may be permanently non-billable.

Administrative rejections can also occur when two home health agencies overlap services for the same beneficiary. Another time they can occur is when discharge and transfer processes are not properly completed. In those cases, Medicare will return claims until the overlap is resolved.

Medicare Administrative Claim Rejections in Hospice

Hospice agencies face similar risk with the Notice of Election (NOE). When an NOE is submitted late, Medicare does not cover hospice services from the admission date through the day before the NOE was received, unless an exception is granted. Those days are lost revenue, even if care was appropriate and fully documented.

Unlike technical rejections, administrative rejections may result in partial or irreversible payment loss, depending on the issue and timing.

What Are Clinical or Medical Necessity-Related Claim Rejections?

Clinical rejections are tied to whether the claim demonstrates that Medicare coverage requirements were met from a clinical standpoint. These are typically identified once a chart is reviewed through the ADR process. 

In home health, this most often involves:

• Missing or invalid physician certifications
• Incomplete or non-compliant face-to-face encounter documentation
• Insufficient documentation of homebound status
• Notes that fail to support skilled need

A common example is a face-to-face encounter that lacks a required element, like a valid practitioner signature or qualifying provider type. Even if services were provided appropriately, Medicare will reject or deny payment if certification requirements are not met exactly as required.

For hospice agencies, clinical rejections frequently involve certification of terminal illness. If physician certifications are missing, unsigned, untimely, or lack sufficient narrative support, Medicare may reject claims or deny payment during medical review.

Clinical rejections are particularly disruptive because they often surface after services are delivered. Because of this, they may require extensive documentation review, correction, or appeal. They also raise compliance concerns beyond a single claim, signaling potential systemic documentation gaps.

What Is the Difference Between Hard and Soft Claim Rejections?

Not all rejections carry the same financial consequences.

A soft rejection is a claim that can be corrected and resubmitted. These typically involve:

• missing data
• minor coding errors
• missing documentation that can still be obtained

While soft rejections delay payment, reimbursement remains possible if the issue is resolved timely.

A hard rejection, however, represents a claim that cannot be paid once rejected. This often occurs when:

• Timely filing limits are exceeded
• Required notices were submitted too late
• Coverage requirements were not met within mandated timeframes

For example, days lost due to late NOAs or NOEs are not recoverable in most cases. Similarly, claims submitted after Medicare’s filing deadline are permanently non-payable.

Understanding whether a rejection is hard or soft is critical. Agencies that treat all rejections the same risk spending time chasing revenue that can no longer be recovered.

How Can Home Health and Hospice Agencies Use Rejection Patterns to Reduce Risk?

Industry data shows that a significant percentage of healthcare claims are rejected on initial submission. Each rejected claim requires staff time to research, correct, and resubmit. For home health and hospice agencies operating on tight margins, even short payment delays can strain operations.

More importantly, repeated rejections often indicate process failures, not isolated mistakes. These could occur in intake, certification, clinical documentation, or billing workflows.

Understanding the different kinds of Medicare claim rejections allows agencies to:

• Prioritize which claims require immediate action
• Identify where operational breakdowns occur
• Make informed decisions about internal systems and external support

Ultimately, claim rejections are not just billing problems, they are compliance indicators that affect financial sustainability.

If you’re concerned about your agency’s internal compliance processes and workflows, you may be a good fit for our Administrative Compliance Program. You can read more about our proven process, or explore our services page to learn more.

If you’re looking for more home health and hospice billing resources, read our Beginner’s Guide to Medicare ADRs to understand why ADRs happen, what Medicare is reviewing, and how home health and hospice agencies can respond confidently and compliantly.

*Disclaimer: The content provided in this article is not intended to be, nor should it be construed as, legal, financial, or professional advice. No consultant-client relationship is established by engaging with this content. You should seek the advice of a qualified attorney, financial advisor, or other professional regarding any legal or business matters. The consultant assumes no liability for any actions taken based on the information provided.