Skilled Nursing Facility Billing Reference Print

Medicare Part A covers Medicare-certified SNF skilled care. Skilled care is nursing or other rehabilitative services, provided according to physician orders, that:

• Require skills of qualified technical or professional health personnel, like registered nurses, licensed practical (vocational) nurses, physical therapists, occupational therapists, and speech-language pathologists or audiologists
• Are provided directly by, or under general skilled nursing or skilled rehabilitation personnel supervision, to assure patient safety and medically desired results
  • General supervision requires initial direction and periodic inspection of the actual activity; the supervisor isn’t always physically present or at the location when the assistant performs services

We consider a service skilled if its inherent complexity can only be performed safely and or effectively by, or under the general supervision of, skilled nursing or skilled rehabilitation personnel.

Original Medicare enrollees must meet these conditions to qualify for Part A-covered SNF services:

• Patient was a hospital inpatient for a medically necessary stay of at least 3 consecutive calendar days
  • Time spent in observation or in an emergency room doesn’t count toward a medically necessary 3-day qualifying inpatient hospital stay
  • A Medicare Advantage (MA) plan, 1876 Cost plan, or Program of All-inclusive Care for the Elderly (PACE) plan may waive the 3-day stay for enrollees
• Patient transferred to Medicare-certified SNF within 30 days after hospital discharge, unless both are true:
  • Patient’s condition makes it medically inappropriate to begin active treatment in a SNF immediately after discharge
  • It’s medically predictable at patient’s hospital discharge that they’ll need covered SNF care within a predetermined time period (generally no more than 30 days), and they meet that prediction
• Patient needs daily skilled nursing or rehabilitation services

Daily skilled services can happen only in a SNF on an inpatient basis if:

• They aren’t available on an outpatient basis in the patient’s location
• When compared to an inpatient setting, transportation to a facility is:
  • Excessive physical hardship
  • Less economical
  • Less efficient or effective
• Services are reasonable and necessary for diagnosing or treating a patient’s qualifying condition and of reasonable duration and quantity

Medicare Advantage Plans

MA plans, 1876 Cost plans, or PACE plans typically waive the 3-day hospitalization requirement. MA plans must cover the same number of SNF days Original Medicare covers, but they may cover more.

Note: For MA plan patients, check with the MA plan for information on eligibility, coverage, and payment. Each plan can have different patient out-of-pocket costs and specific rules for getting and billing for services. You must follow the plan’s terms and conditions for payment.

• MA plans may offer different benefit periods
• Each MA plan’s Evidence of Coverage (EOC) describes all its benefits, including SNF coverage
• Most MA plans offer SNF coverage through network providers paid according to their contracts
  • Non-network SNFs should confirm MA coverage with the enrollee’s MA plan
• MA plans that cover SNF services provided by non-network SNFs pay the Original Medicare payment rate, consistent with MA regulations at 42 CFR 422.214

Exhausted Part A Benefit

• For each benefit period, Part A covers up to 20 full days of care
  • After that, Part A covers up to an additional 80 days, with the patient paying coinsurance for each day
• After 100 days, the SNF coverage available during that benefit period exhausts, and the patient pays for all care, except certain Medicare Part B services

Your Medicare Benefits has more information about patient coverage, costs, and care in a SNF.

Benefit Period

• We measure SNF coverage in benefit periods (sometimes called spells of illness), beginning the day a patient admits to a hospital or SNF as an inpatient
• A benefit period ends after a patient discharges from a hospital or has had 60 consecutive days of SNF skilled care
• Once a benefit period ends, a new benefit period begins when patient admits to a hospital or SNF
  • New benefit periods don’t begin with a change in diagnosis, condition, or calendar year

SNFs must understand benefit periods because sometimes they must submit claims even when they don’t expect payment. This ensures proper benefit period tracking in the Common Working File (CWF). The Special Billing Situations section has more information.

Figure 1 describes the relationships between coverage, skilled care, the benefit period, and type of claim, if any, to submit to us.

Figure 1. SNF Coverage & Billing Summary

Communicating With Patients

Providers should communicate with patients about:

• Whether SNF care is right for them — Medicare skilled care helps improve or maintain the patient’s current condition or prevent or slow its further deterioration
• SNF coverage requirements — Determine if the patient meets SNF coverage requirements before ordering SNF care
  • If the SNF care isn’t medically reasonable and necessary, or is considered custodial care, Part A won’t cover the SNF care
    • Provide the patient a Fee-for-Service (FFS) Skilled Nursing Facility Advance Beneficiary Notice of Non-Coverage (CMS-10055) (SNF ABN)
    • Complete the Notice of Exclusions from Medicare Benefits Skilled Nursing Facility (CMS-20014) (NEMB-SNF)
    • For items or services Part B pays for that we may deny under certain circumstances (if they aren’t medically reasonable and necessary), issue the Advance Beneficiary Notice of Non-coverage (CMS-R-131) to transfer potential financial liability to the patient

We pay SNF services per diem under a Prospective Payment System (PPS). The SNF PPS per diem payment covers all Part A SNF services (routine, ancillary, and capital-related costs), except operating-approved educational activities and services excluded from SNF CB costs under section 1888(e)(4)(E) of the Social Security Act.

We primarily base Part A payment on the patient’s assigned case-mix classification. We use the ICD-10-CM codes on the Minimum Data Set (MDS) in Item I0020B and map these codes to a Patient Driven Payment Model (PDPM) clinical category.

PDPM helps determine payment by classifying SNF patients in covered Part A stays. It affects PPS payments by:

• Improving payment accuracy by focusing on patient characteristics rather than number of services provided
• Reducing administrative provider burdens
• Improving SNF payments to currently underserved patients without increasing our total payments

PDPM website has more information.

We bundle payment for most patient services in a covered Part A SNF stay, including most services provided by entities other than the SNF. SNFs must bill these bundled services to their MAC in a Consolidated Billing (CB). If you or your entity delivered services subject to CB and aren’t the SNF, don’t bill Medicare, bill the SNF.

When we disqualify a patient’s SNF Part A coverage (for example, Part A benefits exhaust, no qualifying 3-day hospital stay, or level of care requirement not met), CB rules don’t apply. There’s no comprehensive institutional coverage like under Part A for a non-covered Part B stay. However, the patient may qualify for Part B medical coverage and other individual health services.

We may pay for:

• Outpatient hospital services to patients who aren’t SNF inpatients:
  • Diagnostic tests (for example, diagnostic X-rays or lab tests)
  • Physical Therapy (PT), Occupational Therapy (OT), or Speech-Language Pathology (SLP) services
  • Physician and surgeon services
• Services excluded from SNF PPS and SNF CB
• Certain medical and other health services to patients residing in a SNF whose Part A benefits exhausted or who aren’t otherwise entitled to Part A payment