Why ADRs Are Rising Under OASIS-E2

ADR Activity Is Up. Here’s Why.

Since OASIS-E2 took effect in 2026, home health agencies are reporting a noticeable increase in Medicare ADR (Additional Documentation Request) activity. Conversations with QA leaders across multiple regions point to the same pattern: more ADRs, more focused on specific OASIS-E2 changes, and more aggressive denial rates on responses.

This isn’t random. There are specific reasons why CMS, MACs, and RACs are intensifying review post-OASIS-E2, and specific things your agency should do now to stay ahead of the curve.

For the foundational guides, see What Is OASIS-E2? and What Is an ADR?.

Reason 1: CMS Always Increases Audit Activity After Major Updates

OASIS version transitions create predictable audit waves. CMS uses post-implementation periods to verify that agencies are actually conforming to the new framework, which means more chart reviews, more ADRs, and more focused scrutiny on the specific items that changed.

We saw this with OASIS-E (2023) and OASIS-E1 (2025). OASIS-E2 is following the same pattern, just with more regulatory infrastructure behind it.

Reason 2: Functional Scoring Patterns Draw Attention

Under PDGM, points on M1800-M1860 and M1033 set the Low / Medium / High functional impairment level. Section GG does not earn PDGM points. OASIS-E2 kept the response options for these items, but it changed the fall definition used in M1033, and CMS recalibrates functional points and thresholds every January.

Payment outlier patterns, such as landing in the High functional level far more often than peers, are a common reason for review. Whether a shift is intentional or not, a narrative which does not support the scores turns a review into a denial.

What to do:

• Compare your functional impairment level distribution before and after OASIS-E2
• Identify clinicians whose M1800-M1860 or M1033 scoring shifted sharply
• Provide focused functional scoring training and use the M1800-M1860 item guide
• Run real-time AI QA flagging unusual scoring patterns

Reason 3: Item Changes Create Data Gaps

OASIS-E2 did not expand SDOH items. CMS removed the planned housing, food, and utilities items in the CY 2026 rule before collection began. It did change several items: A1255 Transportation replaced A1250 and is collected at SOC and ROC only, A0810 Sex replaced M0069, and Language, Hearing, and Vision moved into Resumption of Care. Templates not updated for these changes produce missing or invalid responses.

What to do:

• Check EMR templates for O0350, A1250, and M0069
• Create QA rules flagging missing A1255, B1300, and ROC items
• Train clinicians on A1255: if the patient declines, code 7 and do not use a proxy or records
• See the OASIS-E2 changes page for the full list

Reason 4: BIMS and Cognitive Items Are Being Scrutinized

OASIS-E2 includes refined administration guidance for cognitive screening items (BIMS, PHQ-2/9). Auditors are checking that these items were actually administered per CMS guidance, not estimated from clinical impression.

Common audit finding: BIMS scored as a clean cognitive baseline, but the visit narrative shows no documentation of actually administering the BIMS questions. Auditors infer the score was estimated, which is improper.

What to do:

• Train clinicians on proper BIMS administration
• Document the BIMS administration in the visit note (not just the score)
• Use ambient scribe technology to capture BIMS administration automatically

Reason 5: PDGM Payment-Pattern Outliers Get Flagged Faster

CMS data analytics have improved significantly. Outlier billing patterns get identified within weeks of submission, not months. Agencies whose post-OASIS-E2 PDGM payment per 30-day period shifts dramatically upward face faster ADR selection than they would have in the past.

What to do:

• Capture baseline PDGM metrics before OASIS-E2 implementation
• Monitor PDGM payment per 30-day period weekly
• Investigate any shift more than 5% from baseline
• See the full OASIS-E2 Implementation Playbook

Reason 6: TPE Activity Is Targeting OASIS-E2 Transition Patterns

TPE (Targeted Probe and Educate) reviews are increasingly focused on OASIS-E2 transition patterns. MACs are using TPE selection to verify that agencies have actually implemented OASIS-E2 correctly, meaning agencies that compressed implementation or skipped training are at higher TPE risk.

What to do:

• Document your OASIS-E2 implementation thoroughly (training records, QA rule updates, policy changes)
• If you compressed implementation below 60 days, expect TPE scrutiny
• Consider proactive internal audits to identify weaknesses before MAC does

Reason 7: RAC Focus Areas Have Updated

RAC (Recovery Audit Contractor) audits periodically update their focus areas. Several RACs have published OASIS-E2-related focus areas, including:

• Functional impairment scoring patterns (M1800-M1860 and M1033)
• Social item completeness, such as A1255 Transportation
• BIMS administration documentation
• High-payment clinical groups under refined OASIS-E2 framework

RAC audits are post-payment with a 3-year lookback, so weak documentation from earlier OASIS-E1 era can also surface in current RAC reviews.

Reason 8: Hospice ADRs Are Also Up

Although OASIS-E2 specifically applies to home health, hospice ADRs are also intensifying. CMS scrutiny of hospice billing has been increasing for years, and the post-implementation focus on home health has spillover effects on hospice audit programs.

For hospice agencies: expect continued focus on long-LOS patients, recertification narrative quality, and IDG documentation. See the Hospice ADR Service for tactical guidance.

What This Means for Your Agency

If your agency has not yet experienced an ADR uptick, two things are likely true: (1) you’ve done OASIS-E2 implementation well so far, or (2) you will see increased activity in the next 90-180 days as audit cycles catch up.

Either way, prepare now. The cost of preparation is significantly lower than the cost of reactive scrambling when ADRs arrive in volume.

The 5-Step Preparation Checklist

1. Audit your last 20 ADR outcomes. Are denial rates trending up? Which categories?
2. Verify your OASIS-E2 implementation completeness. Training records, QA rules, EMR forms, policies, all current?
3. Capture baseline metrics. PDGM payment per 30-day period, error rates, time-to-completion. You can’t manage what you don’t measure.
4. Audit your ADR response capacity. Can your QA team handle 2-3x current ADR volume? If not, plan now.
5. Strengthen documentation upstream. Real-time AI QA and ambient scribes prevent most ADR-triggering issues at the visit.

When to Outsource ADR Response

For agencies experiencing rapid ADR volume growth, in-house QA capacity often becomes the bottleneck. Outsourcing options range from traditional ADR response services (Gateway, McBee) to AI-assisted services like Lime’s ADR Response Service which handle the entire response workflow under 1 hour per ADR with 90%+ first-pass approval.

The ROI calculation: at typical claim values of $3,500 and typical denial rates of 30-50% for in-house responses vs 10% for AI-assisted services, a single avoided denial pays for many ADR responses.

What to Do This Week

1. Read the OASIS-E2 Audit Triggers guide
2. Review your Section GG scoring distribution pre/post OASIS-E2
3. Train clinicians on interview items, such as A1255 and BIMS administration
4. Audit your ADR response workflow against the 7-step process
5. Book a 25-minute call if you want to see how AI-assisted ADR response would work at your agency

OASIS-E2 audit activity isn’t going away. The agencies that prepare well will absorb the increased volume without major operational disruption. The agencies that don’t will find themselves reactive, denying-claims-up, and revenue-leaking. Choose now.