Home health agencies facing denied or returned claims due to dementia-related diagnoses will soon be able to resubmit those claims for proper processing.

The issue stems from the implementation of Change Request (CR) 13992 on April 1, 2025, which mistakenly caused some home health and other Part A claims to be returned to providers (RTP) with Reason Code W7113 — indicating an “unacceptable principal diagnosis.” This error has disproportionately impacted claims listing dementia as the primary diagnosis.

Affected claim types (TOBs) include: 013X, 014X, 023X, 032X, 034X, 071X, 072X, 074X, 075X, 076X, 077X, 085X, and 087X. These were incorrectly flagged under W7113 and should not have been returned. In contrast, claims with TOBs 012X, 022X, 081X, and 082X are correctly editing under W7113 and should continue to RTP if they contain a disallowed diagnosis.

According to a May 21, 2025, update from Palmetto GBA, a system update will be implemented on June 2 to resolve this issue. Affected providers are instructed to resubmit their RTP claims on or after June 2. Claims submitted before that date will be held in suspension until the fix is active.

This update will help ensure timely reimbursement for valid claims that were wrongly denied due to the misapplied diagnosis restrictions.