Skilled Nursing Facility Billing Guidelines 

A comprehensive understanding of long-term care billing is key to ensuring correct and timely reimbursements. The article breaks down the specific skilled nursing facility billing guidelines and procedures, offering clear insights into the essential aspects to help healthcare providers master the process and ensure compliance with billing requirements.  

Understanding Skilled Nursing Facility Billing 

Skilled nursing billing is a multi-step process that ensures effective reimbursement for the provided services.  

Step 1: Eligibility verifications. This process effectively begins with the eligibility verification stage. During the patient admission phase, verifying their benefits and eligibility is vital, which may include contacting insurance companies, reviewing documentation, and submitting requests. Often, such decisions should be made very quickly, and that’s why it is recommended to use systems that can verify SNF insurance eligibility automatically.   

Step 2: Understanding Coverage and Patient Responsibility. The next step is to check the patient’s insurance coverage, as there might be out-of-pocket expenses such as copays, coinsurance, and deductibles. Awareness of the patient’s responsibility is essential to prevent any future misunderstandings.  

Step 3: Authorization Requests. Prior authorization ensures that treatments are recognized and approved by the insurance company. Billers must diligently contact insurance providers to obtain the necessary authorizations for services that require approval and to keep track of the duration of the authorized stay. Without securing this approval from the payer, skilled nursing facilities may face claim denials. 

Step 4: Claims Submission. Precision and thorough knowledge of skilled nursing billing software and coding guidelines are paramount at this stage. As a document sent to the insurance company, a claim must include key details like the patient’s personal data, the period of stay, and services provided, all coded correctly. It involves grasping the ICD-10 codes for diagnoses and HCPCS codes for procedures. Each claim must be filled in meticulously, considering all modifiers and relevant information such as the charge amount, patient ID, and authorization number.  

With the transition to the Patient-Driven Payment Model (PDPM), the focus in SNF medical billing has shifted more toward patient conditions and needs rather than the volume of services provided. This development means that the accuracy of the patient’s diagnosis and the thorough documentation of their condition are more important than ever.  

This links back to claim submission, as SNF billers need to ensure that the patient’s medical record accurately reflects their clinical status, as this information is crucial for placing the patient in the correct PDPM payment category. For example, a patient with complex nursing needs and multiple comorbidities would fall into a different payment category than a patient with more straightforward care requirements. This categorization directly affects the reimbursement rate from Medicare. 

Medicare Coverage in Skilled Nursing Billing 

Medicare Part A Coverage in Detail 

A thorough understanding of Medicare Part A coverage is vital for every skilled nursing facility biller, as it is the primary source of coverage for inpatient care in SNFs. Eligibility for Medicare Part A in an SNF context hinges on two key criteria: the patient must have a preceding hospital stay of a minimum of three days and need skilled nursing services, which could include physical therapy, nursing care, or speech-language pathology services.  

For SNF services, Medicare Part A typically covers up to 100 days per benefit period. The coverage includes: 

• The first 20 days: Medicare Part A covers the total cost of SNF care. 
• Days 21 to 100: Patients are responsible for a daily coinsurance amount, and Medicare covers the remaining costs. 
• Beyond 100 days: Medicare Part A does not cover SNF care, and patients must either pay out-of-pocket, use other insurance coverage, or apply for Medicaid. 

What is considered as benefit period?  

• A benefit period under Medicare Part A starts the day the patient is admitted to a hospital or SNF and ends when the patient hasn’t received any inpatient hospital care (or care in an SNF) for 60 consecutive days. 
• Should there be a new instance of hospitalization following the conclusion of a benefit period, the patient becomes once again eligible for up to 100 days of SNF coverage. Notably, there’s no cap on the number of benefit periods a patient may utilize over time.  

It’s crucial to note in this SNF billing guide that Medicare Part A does not cover certain healthcare services, including custodial care and personal items such as telephones and televisions. Billers need to be aware of these exclusions to avoid inaccuracies. 

Medicare Consolidated Billing Explained 

Consolidated billing requires SNFs to submit a single consolidated bill to Medicare for most of the services their residents receive during a covered stay, regardless of whether these services are provided directly by the SNF or an outside entity. This includes: 

• Nursing care 
• Therapy services (physical, occupational, speech-language) 
• Medical supplies 
• Certain physician services 

However, there are a few exceptions, and some certain services are billed separately, such as: 

• Certain dialysis services 
• Certain types of chemotherapy and radiotherapy 
• Services provided by outside suppliers that have a specialized Medicare certification, like ambulance services 

These exception services are often billed under the Medicare Part B structure. 

Understanding these groups is critical for accurate skilled nursing facility billing. For example, if the provider mistakenly includes the cost of an ambulance service (which should be billed separately) in their consolidated bill, it may lead to claim denials. 

SNF billing guidelines provide the framework for consolidating billing. It simplifies the billing process for Medicare but adds a layer of complexity. SNF billers must meticulously determine which services are included in the consolidated bill and which must be billed separately.   

Billing Codes Usage for Accurate Reimbursement 

Medical coding is a fundamental component of our skilled nursing billing guidelines, as it enables seamless and accurate claim processing and reimbursement. These codes act as a standardized way to describe the various healthcare services that are provided. Therefore, thorough analytics of the patient’s condition is vital at this stage.

Let’s explore the specific code sets, according to SNF billing requierements:  

• ICD-10 Codes 

Used for diagnosis coding, reflecting the patient’s condition and reason for care.  

For example, we have a patient in an SNF recovering from a stroke, the ICD-10 code I63.9, which stands for “Cerebral infarction, unspecified,” might be used. This code accurately reflects the condition of a patient who has suffered a stroke and is receiving care in an SNF, perhaps for rehabilitative services like physical therapy, occupational therapy, or speech-language therapy.  

• CPT Codes 

Used to document the medical procedures and services provided to patients. For instance, CPT code 97110 could denote a “Therapeutic procedure, one or more areas, every 15 minutes; therapeutic exercises to develop strength and endurance, range of motion and flexibility.” This code might be applied in the case of a patient receiving physical therapy in the SNF.  

• HCPCS Codes 

HCPCS codes are broader and include services and items not covered by CPT codes. In SNFs, they are used to indicate billing medical supplies, equipment, and non-procedure-based services. For example, a separately billable HCPC code might be a prosthetic device, provided to a patient in the SNF. 

• Revenue Codes 

SNFs also utilize Revenue Codes in their billing processes (like the Health Insurance Prospective Payment System (HIPPS)). They specify the types of services provided to a patient, including room and board, the cost of meals, rehabilitation therapy, medical supplies, and other services. 

SNFs must submit all the services that residents receive to Medicare. If any individual or entity provides services that are covered under Consolidated Billing, but is not the SNF, they cannot bill Medicare for these services. They must bill the SNF for payment of these services as the SNF received the bundled payment from Medicare. This eliminates duplicate billing from multiple entities. 

Payments for SNF Services 

The payment structure for SNF healthcare services, particularly in the context of Medicare, has undergone significant evolution with the introduction of the Patient-Driven Payment Model (PDPM), as we briefly mentioned earlier in this SNF billing guide. Let’s review the model in more detail. 

Understanding the PDPM Components: 

The model categorizes patients into payment groups based on specific clinical characteristics in five key areas:  

• Physical Therapy (PT) and Occupational Therapy (OT) – the patient’s functional status and clinical needs determine the PT and OT components. It includes assessing the patient’s mobility and ability to perform activities of daily living (ADLs). 
• Speech-Language Pathology (SLP) – the SLP component is based on factors like cognitive impairment, swallowing disorders, and speech-related issues. 
• Nursing – this covers a wide range of patient needs and conditions, including comorbidities and the extent of nursing care required. 
• Non-Therapy Ancillary (NTA) services – this component accounts for additional services and supplies not included in the other categories, such as medications and medical equipment. 

Skilled Nursing Billing Under PDPM 

The daily reimbursement rate under PDPM is the sum of the five components’ rates. This rate is specific to each patient and can vary widely depending on their clinical profile. For example, a patient with significant physical therapy needs but minimal nursing requirements would have a higher PT component rate and a lower nursing component rate. The total daily rate is the sum of these component rates. 

Each patient is assessed at the beginning of their stay using the Minimum Data Set (MDS) assessment, which determines their classification in each PDPM component. For instance, PT and OT components are assessed sections of the MDS that include the resident’s ability to perform activities of daily living (ADLs) such as eating, bathing, dressing, and mobility. 

Accurate and thorough completion of the MDS is critical; furthermore, MDS assessment isn’t a one-time task. Regular reassessments are required, especially if there’s a significant change in the patient’s condition. These reassessments can lead to changes in the patient’s classification and, consequently, the daily reimbursement rate. 

PDPM introduces variable payment rates over time for the PT, OT, and NTA components. After the initial 20 days of a patient’s stay, these rates are adjusted downward, reflecting the expectation that the intensity of therapy and NTA services will decrease over time. This adjustment is a significant departure from previous models and further necessitates close monitoring of the length of stay and services provided, as it directly impacts skilled nursing billing. 

Avoiding Common Billing Mistakes in SNF Medical Billing 

To maintain the provider’s financial health, it’s crucial to recognize and address common skilled nursing facility billing errors. Here’s an in-depth look at some of these errors with strategies to avoid them. 

Inaccurate Patient Information. 

Errors in patient data, like misspelled names, incorrect dates of birth, or wrong insurance policy numbers, are common and can lead to claim denials. For instance, if a patient’s name is incorrectly entered as ‘Jon Doe’ instead of ‘John Doe,’ this discrepancy can cause the payer to reject the claim.  

Coding errors 

Ensure the correct application of billing codes. Assigning a higher-level code to increase reimbursement (upcoding) can lead to significant compliance issues and financial losses. Also, double-check that the diagnosis and procedure codes match; otherwise, it might indicate a treatment that is not medically necessary or related to the diagnosis. This can have a big impact on SNF claims management.

Overlooking Authorization Requirements 

Failing to obtain prior authorization for certain procedures or treatments can result in denied claims. For example, if a specific physical therapy session requires prior authorization and it’s not obtained, the claim for that session might be denied. 

Incorrect Billing for Services Not Covered 

Billing for services not covered under a patient’s insurance plan is a frequent error resulting from an incorrect eligibility check. It could occur if an SNF bills for a private room when the patient’s insurance only covers semi-private room accommodations. 

Failure to Coordinate Benefits: 

When patients have multiple insurance policies, billing complications can arise. Incorrectly determining the primary and secondary insurers can lead to claim denials. An example would be billing a secondary insurance before the primary one has processed the claim.  

Neglecting Timely Filing Limits: 

Each insurance provider sets a deadline for claim submissions, and missing these deadlines is a common cause of claim denial. 

Dealing with Billing Errors 

To combat these mistakes on practice, a multifaceted approach is required, blending technological solutions with systematic procedures and staff training. One primary method to counter these errors is the utilization of automated insurance coverage tracking software, such as Approved Admissions. This tool can provide a quick patient eligibility check and automatically alert the facility to any updates or modifications that could affect skilled nursing billing. It also uses the latest patient data, including up-to-date personal information. Therefore, the teams proactively manage insurance coverage details, significantly reducing the risk of billing errors related to a failed eligibility check or outdated insurance data.  

Modern SNF billing software can assist in selecting the appropriate codes. These systems often include up-to-date code databases and validation tools to reduce errors.   

In addition to automated software solutions, other effective strategies include establishing clear communication channels between the billing department and clinical staff. This ensures that any changes in patient care or status that could impact billing are promptly and accurately communicated. Regular training sessions for both clinical and billing staff can also be instrumental. These sessions should focus on the latest billing practices, insurance requirements, accurate documentation, and its impact on billing.  

Actions to Take When Your Claim Has Been Denied 

However, imagine a scenario where an error leads to a claim denial. What steps should be taken next? The initial step is to decipher the reason for the denial, typically detailed in the Explanation of Benefits (EOB) provided by the insurance company. 

If a claim is denied due to inaccurate patient information or coding errors, the foremost step is to rectify these inaccuracies. After making the necessary corrections, the claim should be resubmitted. Confirming that all amendments comprehensively resolve the problems highlighted in the denial is crucial in SNF claims management, thereby avoiding further rejections.  

If the claim is denied for less clear or more complex reasons, such as disputes over the necessity of a service or the level of care provided, filing an appeal may be the appropriate course of action. The appeal process involves a more formal review and typically requires a detailed explanation backed by supporting documents like medical records or proof of prior authorization. Timing is crucial in the appeals process, so be aware of the insurance provider’s deadlines for submitting appeals and adhere to them strictly.  

Key Points to Remember 

The landscape of SNF medical billing is multifaceted, where precision and in-depth knowledge play pivotal roles. In this dynamic field, staying informed about changes in billing practices, regulations, and payer requirements is essential. Continuous education, efficient technology use, and a culture of accuracy and thoroughness within the skilled nursing facility can significantly enhance the billing process.  

The shift to the PDPM payment structure underscores the importance of patient-centered billing practices, where accurate coding and comprehensive documentation are fundamental for securing proper reimbursement.  

The effective management of billing errors is not just about identifying and correcting them but also about understanding the underlying processes and reasons for denials. Whether through claim resubmission or an appeal, the goal remains to ensure that billing accurately reflects the care provided.