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Why Do Behavioral Health Agencies Fail Audits?

By Korey Akinbami ·

Agencies usually fail audits because their records don't prove what they billed: notes are missing, late, copied or don't match the plan. Other common problems are staff credential gaps, missed deadlines and slow responses to findings. Most of these can be found and fixed with regular self-checks.

Agencies usually fail audits because their records don't prove what they billed: notes are missing, late, copied or don't match the plan. Other common problems are staff credential gaps, missed deadlines and slow responses to findings. Most of these can be found and fixed with regular self-checks.

1. Notes that don't support the claim

The DBHDD Provider Manual says every claim needs a note that justifies that service. CMS warns against billing for services that are not documented, or coding a service higher than what was given, such as billing group therapy as individual therapy.

Fix: Check that each note ties to the plan and shows what was done, how the person responded and their progress.

2. Missing times, units or location

For time-based DBHDD services, notes need a time-in and time-out. Out-of-clinic notes must name the actual place. "In the community" is not enough. Telehealth notes must say how the service was delivered and where the person was.

Fix: Build these fields into your note template so they can't be skipped.

3. Late, back-dated or unsigned notes

DBHDD's outer limit is 7 calendar days, with 24 hours as best practice. Late notes must be marked "late entry," and back-dating is not allowed.

Fix: Run a weekly report of open or unsigned notes and follow up fast.

4. Copied and auto-filled notes

CMS cautions that EHR auto-fill and cloned notes can cause problems. The DBHDD manual says notes should reflect the specific session, not duplicate another note.

Fix: Spot-check notes from the same clinician side by side.

5. Staff credential and screening gaps

Reviewers may check whether staff were qualified for what they billed. The DBHDD manual lists approved practitioners for each service. HHS-OIG says to check its exclusion list for new hires and current staff.

Fix: Keep a staff file checklist and re-check licenses and exclusions on a schedule.

6. Missed deadlines and slow responses

Deadlines matter. Some examples:

  • Records requests: the DBHDD manual says records sent after the stated time frame will not be accepted.
  • DATEP surveys: rule 82-10 says you may dispute findings within 10 days, and you must write a corrective action plan within 15 days of a written violations report.
  • Incidents: DATEP programs must report listed incidents within 24 hours.
  • Medicaid revalidation: providers who missed it were suspended effective July 1, 2026.

Fix: Keep one compliance calendar with every deadline and an owner for each.

7. Fixing once, then slipping back

A corrective action plan only works if the fix sticks. CMS's self-audit steps end with "re-audit" for a reason.

Fix: After any finding, set a date to check again and write down what you found.

8. Services at sites that aren't licensed or enrolled

Growth can create findings, too. The DBHDD manual says a place regularly used as a service site may need to be enrolled or licensed as a site. Georgia's DATEP rule says new branch programs need their own license starting July 1, 2026.

Fix: Before you add a location or program, check with DBHDD and DCH.

Build a monthly audit habit

CMS suggests a simple self-audit cycle. Pick charts at random. Have someone other than the writer review them. Find the common problems, fix them and train staff. Then audit again. Doing this every month is far cheaper than paying back claims later.

Key takeaways

  • Most audit failures come from notes that don't prove the billed service.
  • Build times, units, location and modality into note templates.
  • Track unsigned and late notes weekly.
  • Re-check licenses and the OIG exclusion list on a schedule.
  • Keep one compliance calendar; Georgia deadlines can be as short as 24 hours.

How DIG helps

Ducere Investment Group (DIG) has consulted mental and behavioral health agencies for 14 years. We help Georgia agencies find weak spots early, build corrective action plans and set up habits that hold. We are a business consultant. We do not give legal advice or patient care, and we cannot promise any audit outcome.

See our services or contact us. Call 404-565-0181.

Sources

Written by Korey Akinbami, Founder & Principal. Published by Ducere Investment Group, Inc.

This article is general information, not legal, medical or billing advice.

Frequently Asked Questions

What is a corrective action plan?

It is a written plan to fix problems found in a survey or audit. Georgia's DATEP rule requires one within 15 days of a written violations report.

Can we dispute audit findings?

Often, yes. For DATEP surveys, rule 82-10 allows an explanation or dispute within 10 days. Other reviewers have their own appeal rules, so read your letter closely.

Can an agency lose money after an audit?

Yes. Payments for services that are not properly documented may be denied or recovered. The DCH Office of Inspector General reviews and audits Medicaid providers.

How do we find problems before auditors do?

Run regular self-audits with random charts, a reviewer who did not write them and a re-check after fixes, as CMS suggests.