Understanding the billing processes in Skilled Nursing Facilities (SNFs) is crucial for residents and their families to manage healthcare expenses effectively. The Centers for Medicare & Medicaid Services (CMS) regularly updates guidelines that directly impact resident costs. In this blog, we’ll explore the fundamentals of SNF billing and highlight key changes from CMS’s recent guidelines.
Overview of SNF Billing
SNFs provide specialized care for individuals requiring rehabilitation or skilled nursing services post-hospitalization. Billing for these services is primarily governed by Medicare, particularly Part A, which covers inpatient hospital stays, care in SNFs, hospice care, and some home health care.
Medicare Coverage for SNF Services
Medicare Part A covers up to 100 days of SNF care per benefit period under specific conditions:
-
Qualifying Hospital Stay: A prior inpatient hospital stay of at least three days.
-
Admission Timing: Admission to the SNF within a short period (generally 30 days) after leaving the hospital.
-
Medical Necessity: The need for skilled care, such as physical therapy or intravenous injections, as prescribed by a doctor.
For the first 20 days, Medicare covers the full cost of care. From days 21 to 100, beneficiaries are responsible for a daily coinsurance amount, which may change annually based on CMS updates.
Consolidated Billing in SNFs
CMS mandates consolidated billing for SNFs, meaning the facility is responsible for billing almost all services provided to a resident under Medicare Part A. This includes services like:
-
Therapies (physical, occupational, speech)
-
Medications
-
Lab tests
-
Medical equipment
Certain services are excluded from consolidated billing, such as physician services and specific high-cost treatments. Residents should consult with their SNF to understand which services are included and which are billed separately.
Recent CMS Updates Impacting Resident Costs
In the Fiscal Year 2025 final rule, CMS announced a net increase of 4.2% in Medicare Part A payments to SNFs. This adjustment reflects a 3.0% market basket increase, a 1.7 percentage point forecast error adjustment, and a 0.5 percentage point productivity adjustment.
Additionally, CMS is rebasing and revising the SNF market basket to a 2022 base year to improve payment accuracy. The agency is also updating the SNF Prospective Payment System (PPS) wage index using new Core-Based Statistical Areas (CBSAs) to better reflect geographic variations in labor costs.
Quality Reporting and Value-Based Purchasing Programs
CMS continues to enhance the SNF Quality Reporting Program (QRP) and the SNF Value-Based Purchasing (VBP) Program to improve care quality and incentivize high performance. For FY 2025, CMS is adding new measures to the SNF QRP, including assessments related to social determinants of health, such as living situation, food security, and utility needs. SNFs failing to meet reporting requirements may face a 2% reduction in their Annual Payment Update.
In the SNF VBP Program, CMS is adopting new quality measures, including the Nursing Staff Turnover Measure to assess staffing stability and the Discharge Function Score Measure to evaluate residents’ functional status at discharge. These measures aim to promote better care outcomes and encourage SNFs to maintain consistent and qualified staffing.
Impact on Residents
These updates may influence the cost of care for residents. While increased payments to SNFs could enhance service quality, residents might experience changes in out-of-pocket expenses, especially if facilities adjust their fee structures in response to CMS payment updates. It’s essential for residents and families to stay informed about these changes and engage in open communication with their SNF providers to understand potential financial implications.
How Medical Billers and Coders (MBC) Can Help
Navigating Skilled Nursing Facilities Billing complexities requires expertise in Medicare guidelines, coding accuracy, and claims management. Medical Billers and Coders (MBC) specialize in streamlining SNF billing processes to minimize errors and maximize reimbursement. Here’s how MBC can help:
- Accurate Coding: Ensuring correct CPT, HCPCS, and ICD-10 codes for SNF services, reducing the risk of claim denials.
- Claims Submission & Follow-up: Managing timely claims submissions and handling denials or rejections efficiently.
- Medicare Compliance: Keeping up-to-date with CMS guidelines to ensure compliance and avoid penalties.
- Consolidated Billing Assistance: Helping SNFs navigate bundled billing requirements to ensure proper reimbursement.
- Revenue Cycle Optimization: Identifying revenue leakages and improving cash flow by reducing delays in reimbursements.
By partnering with MBC, SNFs can focus on providing quality patient care while ensuring smooth and efficient billing operations.
FAQs
Q1: What services are covered under Medicare Part A in an SNF?
Medicare Part A covers services such as semi-private room accommodations, meals, skilled nursing care, rehabilitation services, medications, and medical supplies and equipment used in the facility.
Q2: Are there services not included in SNF consolidated billing?
Yes, certain services like physician services, specific high-cost treatments, and some emergency services are excluded from consolidated billing and may be billed separately.
Q3: How does the 2025 CMS payment update affect my SNF costs?
The 4.2% increase in Medicare payments to SNFs may lead to changes in facility fee structures. It’s advisable to discuss with your SNF provider to understand how this update impacts your out-of-pocket expenses.
Q4: What are the new quality measures in the SNF QRP and VBP Programs?
CMS has introduced measures focusing on social determinants of health, nursing staff turnover, and discharge function scores to enhance care quality and accountability in SNFs.
Q5: How can I stay informed about changes in SNF billing and CMS guidelines?
Regularly reviewing updates from CMS’s official website and maintaining open communication with your SNF’s billing department can help you stay informed about any changes affecting your care and costs.
Understanding SNF billing and staying updated on CMS guidelines are vital steps in managing healthcare expenses effectively. By staying informed and proactive, residents and their families can navigate the complexities of SNF billing with greater confidence.
