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Basics of Medicare Consolidated Billing for SNFs


Basics of Medicare Consolidated Billing for SNFs

Need for Consolidated Billing for SNFs

Prior to the Balanced Budget Act of 1997 (BBA), a Skilled Nursing Facility (SNF) could elect to furnish services to a resident in a covered Part A stay, either, directly using its own resources; through the SNF's transfer agreement hospital; or under arrangements with an independent therapist (for physical, occupational, and speech therapy services). In each of these circumstances, the SNF billed Medicare Part A for the services.

However, the SNF also had the further option of ‘unbundling’ a service altogether; that is, the SNF could permit an outside supplier to furnish the service directly to the resident, and the outside supplier would submit a bill to Medicare Part B, without any involvement of the SNF itself.

This practice created several problems, including the following:

  • Potential for duplicate (Parts A/B) billing if both the SNF and outside supplier billed;
  • An increased out-of-pocket liability incurred by the beneficiary for the Part B deductible and coinsurance even if only the supplier billed; and
  • A dispersal of responsibility for resident care among various outside suppliers adversely affected quality (coordination of care) and program integrity

Then Balanced Budget Act of 1997 (BBA), was enacted, containing a Consolidated Billing (CB) requirement for SNFs. Under the CB requirement, an SNF itself must submit all Medicare claims for the services that its residents receive. Conceptually, SNF CB resembles the bundling requirement for inpatient hospital services that's been in effect since the early 1980s, assigning to the facility itself the Medicare billing responsibility for virtually the entire package of services that a facility resident receives, except for certain services that are specifically excluded.

CB eliminates the potential for duplicative billings for the same service to the Part A fiscal intermediary by the SNF and the Part B carrier by an outside supplier. It also enhances the SNF's capacity to meet its existing responsibility to oversee and coordinate the total package of care that each of its residents receives.

Effects of Consolidated Billing for SNFs

SNFs can no longer ‘unbundle’ services that are subject to CB to an outside supplier that can then submit a separate bill directly to the Part B carrier. Instead, the SNF itself must furnish the services, either directly, or under an ‘arrangement’ with an outside supplier in which the SNF itself (rather than the supplier) bills Medicare. The outside supplier must look to the SNF (rather than to Medicare Part B) for payment. SNF consolidated billing:

  • Provides an essential foundation for the SNF PPS, by bundling into a single facility package all of the services that the PPS payment is intended to capture;
  • Spare's beneficiaries who are covered by Part A stay from incurring out-of-pocket financial liability for Part B deductibles and coinsurance;
  • Eliminates potential for duplicative billings for the same service to the Part A fiscal intermediary (FI) by the SNF and to the Part B carrier by an outside supplier; and
  • Enhances the SNF's capacity to meet its existing responsibility to oversee and coordinate each resident's overall package of care.

Excluded Services from Consolidated Billing

As mentioned above, there are a number of services that are excluded from SNF CB. These services are outside the PPS bundle, and they remain separately billable to Part B when furnished to an SNF resident by an outside supplier. However, bills for these excluded services, when furnished to SNF residents, must contain the SNF's Medicare provider number. Services that are categorically excluded from SNF CB are the following:

  • Physicians' services are furnished to SNF residents. These services are not subject to CB and, thus, are still billed separately to the Part B carrier.
  1. Many physician services include both a professional and a technical component, and the technical component is subject to CB. The technical component of physician services must be billed to and reimbursed by the SNF.
     
  2. Section 1888(e)(2)(A)(ii) of the Social Security Act specifies that physical, occupational, and speech-language therapy services are subject to CB, regardless of whether they are furnished by (or under the supervision of) a physician or other health care professional.
  • Physician assistants working under a physician's supervision;
  • Nurse practitioners and clinical nurse specialists working in collaboration with a physician;
  • Certified nurse-midwives;
  • Qualified psychologists;
  • Certified registered nurse anesthetists;
  • Services described in Section 1861(s)(2)(F) of the Social Security Act (i.e., Part B coverage of home dialysis supplies and equipment, self-care home dialysis support services, and institutional dialysis services and supplies);
  • Services described in Section 1861(s)(2)(O) of the Social Security Act, i.e., Part B coverage of Epoetin Alfa (EPO, trade name Epogen) for certain dialysis patients. Note: Darbepoetin Alfa (DPA, trade name Aranesp) is now excluded on the same basis as EPO;
  • Hospice care related to a resident's terminal condition;
  • An ambulance trip that conveys a beneficiary to the SNF for the initial admission, or from the SNF following a final discharge.


While CB excludes the types of services described above and applies to the professional services that the practitioner performs personally, the exclusion does not apply to physician ‘incident to’ services furnished by someone else as an ‘incident to the practitioner's professional service. These ‘incident to’ services furnished by others to SNF residents are subject to CB and, accordingly, must be billed to Medicare by the SNF itself.

We shared an excerpt from the CMS website for reference, you can refer to Consolidated Billing for detailed information. Medical Billers and Coders (MBC) is a leading medical billing company providing complete revenue cycle services. If you are looking for any assistance in Medicare billing for your practice, contact us at info@medicalbillersandcoders.com/ 888-357-3226

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