Skilled Nursing Facility (SNF) billing is a complex process involving multiple steps to ensure an effective business outcome.
Patients often need help understanding how their insurance policy works, its benefits, and the details of its coverage. Moreover, they may be unaware of recent updates to their policies, resulting in further difficulties during the billing cycle. Thus, careful attention to different aspects of a patient’s insurance plan is vital for successful reimbursement.
By examining each step, let’s check how your facility can optimize its performance throughout the billing process and manage various aspects of patients’ insurance coverage.
1. Eligibility verification stage
In an SNF billing department, verifying benefits and eligibility is the first step in initiating the medical billing cycle. It is an integral part of the billing process, without which all other actions could be pointless. It is akin to the foundation of a building, as everything else constructed on top of it could crumble without a sturdy base. During the admission stage, benefits verification involves:
- Contacting insurance companies via phone calls
- Reviewing documentation
- Submitting requests to carriers and members
Approved Admissions can assist at this stage by automatically verifying eligibility and identifying a payer source during the admission process, eliminating the need to contact the insurance company. Before admitting a patient, billers should ascertain who will cover their patients’ benefits, which depends on various factors such as length of care, patient age, and financial situation. In the case of long-term care in a skilled nursing facility, Medicare or a private payer that replaces traditional Medicare (HMO) typically covers the costs. Medicare documentation guidelines for skilled nursing facilities specify that patient care should be covered for approximately 100 days, after which patients must either pay for their care or enroll in Medicaid. To ensure that the billing team and patients are prepared and aware of who is responsible for payment, these questions and hypothetical situations should be addressed before admission. Therefore, Approved Admissions plays a critical role in the success of nursing home billing.
The official website of the Centers for Medicare and Medicaid Services (CMS) provides comprehensive information on Medicare skilled nursing facility billing, including the guidelines.
Coverage depends on the length of care delivered to patients:
- For long-term care: If patients lack sufficient funds for continuous care, they may qualify for Medicaid, and the billing team will handle the necessary documentation to establish their membership. In other cases, if a patient’s 100 days of Medicare benefit coverage have expired, they will be considered a private payer if they have enough funds to cover further medical expenses.
- For short-term care: Medicare and HMO cover short-term care for 100 days. When performing skilled nursing facility billing for Medicare Advantage, billers should determine the type of patient plan (HMO, PPO, EPO, etc.) The type of plan determines whether a facility can provide services to the patient and still be reimbursed for them. For instance, a patient with an HMO plan may come for treatment, and an insurance company will not reimburse for services because the skilled nursing facility has not signed a contract with this insurance company (since it is not a part of the HMO network). Many denials are caused by a lack of research by the billing staff to identify different types of plans and coverage.
Apart from long/short-term care, it is also necessary to separately highlight end-of-life care. In this case, hospice takes over and sends bills to Medicaid.
Determining the patient’s liability is vital during the verification stage. Insurance companies typically do not fully cover most medical services, and patients must pay a certain amount for their treatments “out of pocket.”
Such payments include:
- Copays (the fixed dollar amount paid before the visit or treatment)
- Coinsurance (the percentage of the total insurance amount allowed)
- Deductible (the fixed amount a patient must pay before insurance kicks in).
One of the most common issues that Approved Admissions encounters is patients not understanding how much they need to pay out of pocket, leading to them not paying for part of their claim. It is critical to check these expenses before admission, as some patients may refuse to pay later, leaving the SNF billing team to deal with the collection process.
Approved Admissions also indicates whether a patient has used up their allotted number of days in the facility, known as benefit days. For short-term skilled nursing, patients can typically stay in the facility for a set number of days, and after that, services are no longer covered. It is also important to check the number of benefit days before admission and inform the patient immediately if they are coming to an end.
Unforeseen circumstances may result in denials, and patients may need to pay out of pocket, which they may be reluctant to do for various reasons. Such situations can occur when a policy has been terminated. The billing staff should verify whether the patient has another active policy. If there is none, patients must pay for the cost of treatment themselves.
Successful verification is essential for the smooth operation of the entire billing process. Only after identifying a payer source for the care provided can we proceed to the subsequent stages of the billing process.
2. Authorization Requests
In SNF billing, obtaining prior authorization is of utmost importance. It ensures that the insurance company recognizes and approves all treatments before they are delivered to the policyholder/patient. Failure to get authorization results in further claim denials.
The biller must contact the insurance company via phone or fax to obtain authorization. The process of drafting and submitting the request requires extensive knowledge and experience from the billing staff.
The facility must track which services require authorization and the maximum number of days a patient can be admitted. The insurance company determines the number of benefit days for a stay in the facility. Suppose a patient exceeds the allowed time frame, stays longer than authorized, or receives unauthorized treatment. In that case, the insurance company may deny the claim or only partially compensate for the services. Therefore, the billing staff’s primary objective at this stage is to ensure that the patient is authorized and that the skilled nursing facility will secure full reimbursement.
3. The medical claims submission stage
The next stage is claim submission using billing software. At this point, a biller must understand how to use all the software features and know the specifics of skilled nursing facility coding guidelines. Even the slightest technical error can lead to incorrect submission and claim rejection.
The claim is a document sent to the insurance company containing key details such as the patient’s personal data, period of stay, and services provided (using correct codes).
The main goal at this stage is to correctly fill in the claim and consider all the nursing home billing codes, modifiers, and relevant information on the claim form (including SNF billing codes corresponding to treatments delivered, the charge amount, patient ID, and authorization number). The biller must fill in all the patient’s details and insurance information correctly; otherwise, a claim will likely be rejected.
Much useful information regarding Medicare and Medicaid coding can be found on the CMS website.
4. Dealing with the claim denials
Insurance companies use several types of payment: paper checks, EFT (electronic fund transfer), or VCP (virtual card payments). When the facility gets paid, billers use billing software to post these payments into the system.
In an ideal medical billing scenario, insurance providers would pay claims without delay or reluctance. However, this is not always the case in reality, which means that the biller must handle denials, which is frustrating and time-consuming.
Denial handling refers to a set of actions taken to ensure that the insurance company pays for services that were previously denied. A medical biller must possess extensive knowledge of facility billing guidelines to prevent claims from being rejected. This demanding role requires a great deal of responsibility, as it entails familiarity with the specifics of working with insurance companies and the most frequent causes of claim denials.
Check the most common types of denials on the Medical billers and Coders portal.
Basic strategies in denial handling:
- Claim resubmission. First, there is a possibility to send a reworked and fixed claim to the insurance company using billing software. For example, if there is a denial due to a lack of authorization, the biller can input the missing information and resubmit the claim. Adherence to the SNF billing guidelines and submitting the claim to the carrier on time is important, as late resubmission may result in another claim denial.
- Sending a claim for reprocessing. This step is more tedious as it involves calls to the insurance company and understanding the reason for the claim’s initial denial. While on the call, the biller explains to the insurance representative why the claim should be reimbursed and why the healthcare provider disagrees with the denial. If the insurance representative deems the explanation valid, the claim is submitted for reprocessing.
- Filing appeals. If correcting claims or reprocessing via call cannot resolve a denial, a biller can file an appeal – a written request to the insurance company asking them to review a previously denied claim or benefit. During the appeal process, the biller must consider the reason for the denial and convince the insurance company that it is not justified. Let us consider an example where an insurance company denies a claim due to late submission. In such a case, the billing staff must provide evidence that the claim was sent on time, such as postal envelopes or screenshots from billing software showing the submission time. The billing staff can also provide reference numbers from conversations with insurance representatives, where they confirm that the filing limit was, for instance, six months, not three months, as the denial states. Even if a claim was sent in late, billers should not give up; they can still file an appeal stating that the services were medically necessary for the patient’s condition or diagnosis. It is important to be persistent and convince the insurance company that your skilled nursing facility is committed to resolving the denial. Further details about the appeal process can be found here.
All aspects of SNF consolidated billing must be maintained at a high standard to maximize efficiency. Given the changes in insurance guidelines and revisions of fee schedules, providers recognize that the billing process should be a carefully crafted plan incorporating sound decision-making and problem-solving. A well-planned and executed medical billing process benefits healthcare providers and patients, ensuring service reimbursement.
Medical billing components form a pyramid in which every element is crucial and equally significant. Proper eligibility verification and facility admission is the foundation for all other billing procedures. Effective performance at this stage results in fewer denials, leading to increased revenue for the skilled nursing facility.
Knowledge of skilled nursing coding guidelines reduces the risk of rejections. Consequently, it is better to avoid them by performing proper eligibility checks, authorization requests, and submissions (although, in some cases, there are denials that billing staff cannot predict due to unforeseen circumstances).
By preventing problems before they occur, healthcare providers can maximize their revenue and get proper service reimbursement. The well-organized billing process should prevent any issues a provider may encounter; however, if any problems arise, billers make every effort to resolve them.