In this study, we address the issue of API hallucinations in various software engineering contexts. We introduce CloudAPIBench, a new benchmark designed to measure API hallucination occurrences. CloudAPIBench also provides annotations for frequencies of API occurrences in the public domain, allowing us to study API hallucinations at various frequency levels. Our findings reveal that Code LLMs struggle with low frequency APIs: for e.g., GPT-4o achieves only $38.58$% valid low frequency API invocations. We demonstrate that Documentation Augmented Generation (DAG) significantly improves performance for low frequency APIs (increase to $47.94$% with DAG) but negatively impacts high frequency APIs when using sub-optimal retrievers (a $39.02$% absolute drop). To mitigate this, we propose to intelligently trigger DAG where we check against an API index or leverage Code LLMs’ confidence scores to retrieve only when needed. We demonstrate that our proposed methods enhance the balance between low and high frequency API performance, resulting in more reliable API invocations ($8.20$% absolute improvement on CloudAPIBench for GPT-4o).